USDA Section 502 Direct Home Loan
FreeCost share · Free to qualifying landowners, from USDA Rural Development
Zero down, subsidised rate as low as 1 percent, for low and very low income buyers in eligible rural areas. Funds can build, repair or relocate a home, or buy and prepare a site including water and septic. A rule effective February 10, 2026 lowered the modest home cap from 80 to 60 percent of the local FHA Section 203(b) limit and added appraised value caps, which disqualifies more higher value rural homes.
The low rate is not the rate: payment assistance is a subsidy that brings the payment down for a period, sized on your adjusted family income, and it can take the effective interest as low as 1 percent. There is a string attached that people miss, so read it twice. You have to pay back all or part of the subsidy you received when the title changes hands or when you stop living in the house. The term can run to 33 years, or 38 for very low income applicants who cannot manage the payments over 33. The money is not only for buying: it will build, repair, renovate or move a home, or buy a site and get it ready, including bringing in water and a septic system. The house cannot be worth more than the loan limit for your area. Where this comes from
Who qualifies Low and very low income buyers in eligible rural areas; test the parcel and income on the USDA eligibility map.
How to apply Check eligibility at eligibility.sc.egov.usda.gov, then apply through Rural Development.
Listed on their own website or an official directory. We have not called it.
Where it applies
Everywhere in the United States.
The states with county pages in this directory:
Also from USDA Rural Development
- USDA Section 504 Home Repair Loans and GrantsFreeCost share
