Who can apply for this program?
A number of factors are considered
when determining eligibility for
Single Family Direct Home Loans. At
a minimum, applicants must have an
adjusted income that is at or below
the applicable low-income limit for the
area in which they wish to buy a house
(an income limit map is available at
this link: https://go.usa.gov/xzcfb). They
must also demonstrate a willingness
and ability to repay debt.
Applicants must:
• Be without decent, safe, and
sanitary housing
• Be unable to obtain a loan from
other resources on terms and
conditions that can reasonably be
expected to be met
• Agree to occupy the property as
their principal residence
• Have the legal capacity to incur a
loan obligation
• Meet citizenship or eligible
noncitizen requirements
• Not be suspended or debarred from
participation in federal programs
Properties financed with direct loan
funds must:
• Be modest in size for the area
• Not have market value in excess of
the applicable area loan limit
• Not be designed for income producing activities
Borrowers are required to repay all or a
portion of the payment subsidy received
over the life of the loan when the title to
the property transfers, or the borrower
is no longer living in the dwelling.
Applicants must meet income
eligibility for a direct loan.
You can
visit the USDA Income and Property
Eligibility website
: https://www.rd.usda.gov/
browse-state) to learn more.
What is an eligible area?
Properties must be located in an
eligible rural area. Visit the USDA
Income and Property Eligibility
website (available at this link:
https://go.usa.gov/xzcdM) for details.
How can funds be used?
Loan funds can be used to help
low-income people or households
buy homes in rural areas. Funds can
be used to build, repair, renovate, or
relocate a home, or to purchase and
prepare sites, including providing
water and waste treatment equipment.
How much can I borrow?
The maximum loan amount an
applicant qualifies for depends on
their ability to repay a loan. Rural
Development considers various factors,
such as income, debts, assets, and
the amount of payment assistance
the applicant is eligible to receive.
Regardless of repayment ability,
applicants can never borrow more
than the area loan limit (plus certain
other costs eligible to be financed)
in the county in which the property is
located (information is available at this
link: https://go.usa.gov/xzcGB - PDF)
Rural Home Loans (Direct Program)
What is the interest rate and
payback period?
• The interest rate is fixed, and based
on current market rates at loan
approval or closing, whichever is lower.
• When modified by payment
assistance, the monthly mortgage
payment can be reduced to a low as
an effective 1 percent interest rate.
• The payback period is 33 years
(38 years for very-low-income
applicants who can’t afford a
33-year loan term).
How much down payment
is required?
Down payments are not typically
required, but applicants with assets
higher than the asset limit can be
required to use a portion of those assets.
Is there a deadline to apply?
Applications are accepted year-round
through your local Rural Development
office. A map is available at this link:
https://www.rd.usda.gov/browse-state.
How long does an application take?
Processing times vary depending
on funding availability and program
demand in the area in which the
applicant is interested in buying.
Processing times also are dependent
upon the completeness of the
applicant’s package.
