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Section 502 Direct Loan Program


Over 60 years, the Section 502 Direct Loan Program has helped more than 2.1 million families realize the American Dream and build their wealth by more than $40 billion. It is the only federal homeownership program that is exclusively targeted to very low- and low-income rural families. By law, at least 40 percent of Section 502 funds must be used to assist families earning less than 50 percent of the area median income. Three-fourths (74 percent) borrowers have incomes less than 60 percent of AMI, with an average income less than $28,275. With a Section 502 Direct Loan, these families can access affordable, safe mortgages with interest rates starting at just 1 percent over a 38-year term.

Section 502 is the single, most cost-effective federal housing program; on average, Section 502 loans costs $3,000 over its entire lifetime.

Despite the program’s success, demand for the rural housing outpaces supply; over 12,500 loan applications−amounting to $1.5 billion- are typically on Section 502 waiting lists.

What to learn more about Section 502 Direct?