Single Family Home Loan Programs

USDA Rural Development offers two types of homeownership loans; direct and guaranteed. These loans are for the purchase, construction, or rehabilitation of a dwelling and related facilities for very low, low, and moderate income rural persons.

What is the difference between a "direct" and a "guaranteed" home loan?
A direct loan is a loan directly from the government. Qualified applicants work with a local Rural Development office throughout the application process.

A guaranteed loan is a loan made by a traditional lender (bank, mortgage lender, credit union) and "guaranteed" by the government against default. Qualified applicants work with the lender throughout the application process. Contact the North Carolina Rural Development State Office at 919-873-2051 for questions.

How do I know if I qualify for either a direct or guaranteed loan?
Visit the Income and Property Eligibility page For both programs, the home must be modest in size and located in an eligible rural area of 20,000 people or fewer.

Direct loans are intended for qualified low and very-low income homebuyers unable to obtain financing elsewhere.

Guaranteed loans are intended for moderate-income homebuyers and are administered through traditional lending institutions such as banks.

What are interest rates?
For direct loans, a payment subsidy is available that could bring the interest rate as low as one percent for qualified applicants. Typically, monthly payments are between 22 and 26 percent of an applicant's income.
For guaranteed loans, the interest rate and terms are negotiated between the lender and borrower.

How do I know if I qualify with my income?
Visit the Income and Property Eligibility page.