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 Housing Eligible Areas:
Changes to housing eligible areas based on 2010 Census data that were scheduled to take effect on October 1, 2014, due to “rural in character” criteria have been postponed until October 1, 2015, by request of the Secretary. Complete applications received before October 1, 2015, will continue to use rural area definitions based on 2010 Census data.
Current program timelines:
Due to budget cuts and staff reductions, guaranteed housing lenders are advised that turn times for processing complete guarantee requests through the Section 502 Guarantee program are approximately 35 business days. These approximate turn times are subject to change without further notice. (Updated 8/07/2014.)
Increase in Annual Fee for Both Purchase and Refinance Guarantee Housing Loans
On October 1, 2014, the annual fee for both purchase and refinance guaranteed housing loans will increase from 0.4% to 0.5%. For more details, click here.
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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