Rural Housing Guaranteed Loan (Section 502 Guarantee)
The mission of USDA Rural Development Single Family Housing Guaranteed Loan Program is to help low- to moderate-income rural homebuyers achieve their dream of homeownership.
Through the program, USDA Rural Development partners with approved local lenders to extend fixed-rate, 100-percent financing opportunities to eligible rural individuals and families for the purchase of safe and sanitary dwellings. The guarantee eliminates the need for a down payment and private mortgage insurance. Guaranteed loans have assisted thousands of homeowners to purchase a home with affordable interest rates and loan terms. Applicants must purchase a home within eligible rural areas and have a household income that does not exceed the established limits where the home is located.
Changes to the housing eligible areas map based on 2010 Census data scheduled to take effect 1/15/14, have been postponed to 10/1/14 by passage of the Consolidated Appropriations Act, 2014. View "Future Eligible Areas."
Complete applications received before October 1, 2014, will continue to use rural area definitions based on 2000 Census data.
Current program timelines:
Due to budget cuts and staff reductions, guaranteed housing lenders are advised that turn times for processing guarantee requests throught the Section 502 Guarantee program are approximately 10 business days. (Updated 4/16/2014.)
Rural Development will notify the lender if the loan package is incomplete. Incomplete applications will be returned to the lender if the package will not or cannot be made complete within 3 working days in accordance with RD Instruction 1980-D subparagraph 1980.354(b).
Program Information for Homebuyers
Applicants for loans may have an income of up to 115% of the median income for the area. Click here to visit the online income eligibility tool. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.
The home to be purchased must be located in an eligible rural area. Properties with income producing potential, as well as with non-essential buildings (i.e. guest houses, horse corral, barns, etc.) are ineligible for a USDA loan guarantee. For more information about prohibited loan purposes, please see RD Instruction 1980-D or review the following presentation Eligible Versus Prohibited Loan Purposes and Buildings Not Essential for Rural Housing Purposes version 2 (PPT, 2.7 MB).
How to Apply:
- Contact a lender of your choice (bank, credit union, etc.) willing to make your loan with a USDA guarantee. It is always a good idea to contact your existing bank or credit union to learn if they are willing to participate in the USDA loan guarantee. Or, you may want to locate a lender currently participating as an approved lender for the Section 502 Loan Guarantee program in Oregon. Lenders not not currently working through the program may contact USDA to become an approved lender. USDA does not endorse or promote any lender or their services.
- Work directly with your lender to complete your loan application package. Your lender will submit required information to USDA Rural Development on your behalf.
Program Information for Guaranteed Lenders
How to Become a USDA Guaranteed Housing Lender:
- First, review the Guaranteed Lender Handbook (PDF, 924 KB). Next, work with USDA Rural Development to become an approved lender.
- Also, be sure to review the following presentation: Eligible Versus Prohibited Loan Purposes and Buildings Not Essential for Rural Housing Purposes version 2 (PPT, 2.7 MB). For more information about prohibited loan purposes, please see RD Instruction 1980-D.
- Next, contact us at firstname.lastname@example.org or call 866-923-5626 extension 1.
Resources for Developing a Guarantee Request: RD Instruction 1980-Dural Housing Loans:
To Submit a Guarantee Request:
Submit all Section 502 Home Loan Guarantee requests to email@example.com. For questions, please contact us at firstname.lastname@example.org or call 866-923-5626 extension 1.
Helpful Links and Fact Sheets
Sign Up for Program Alerts
Click here to sign up for Oregon
"Single Family Housing Program Notices"
and other e-mail alerts from USDA Rural Development.
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