Section 502 Loans

There are several variations of the basic section 502 direct loan program.

Section 502 loans. The section 502 direct loan program offers mortgages for low income homebuyers in rural areas. Proceeds from a section 502 home loan may be used to build repair renovate or relocate a home or to purchase and prepare sites including providing water and sewage facilities. Also known as the section 502 direct loan program this program assists low and very low income applicants obtain decent safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant s repayment ability.

Rural housing and economic development gateway u s. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. You qualify for the usda 502 home loan program by meeting the.

Section 502 is the single most cost effective federal housing program. Section 502 direct is operated by the u s. A separate section 502 guaranteed loan program provides government guarantees of loans made by banks or others 1.

Dept of housing urban development 451 7th street s w room 7137 washington dcmae and ginnie mae acceptability on the secondary 20410 1 877 rural26 1 877 787 2526 www hud gov ruralgateway. Department of agriculture 502 loan is a federally guaranteed loan designed to encourage home ownership in rural areas. Despite the program s success demand for the rural housing outpaces supply.

The rural housing service rhs is a part of rural development rd in the u s. Section 502 loans are a rural housing loan program administered by the rural housing service rhs authorized under section 502 of the housing act of 1949. Guaranteed rural housing loans section 502 january 2004.

Applicants must meet certain criteria to qualify for a usda rural development section 502 loan. Department of agriculture usda. On average section 502 loans costs 3 000 over its entire lifetime.