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?
- NRHC Fact Sheets
- Section 502 Impact Video –Created by NRHC member organization, PathFinder Services.
- Section 502 Case Study: Violet Lewis – See how Violet Lewis build a new home in Harlan County, Kentucky with a USDA Section 502 Direct Home Loan after her house was completely destroyed in a fire.