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. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
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 meet
Agree to occupy the property as your primary 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:
Generally be 2,000 square feet or less
Not have market value in excess of the applicable area loan limit
Not have in-ground swimming pools
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.