U.S. flag

An official website of the United States government

Dot gov

Official websites use .gov
A .gov website belongs to an official government organization in the United States.


Secure .gov websites use HTTPS
A lock () or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

USDA Direct Home Loans Cater to Very Low Income Rural Homebuyers

Kelly K. Clark
Carson City
Release Date

Many very low-income people have stopped dreaming of homeownership due to life circumstances, which is sad. But with rental costs on the rise, it is often more cost effective to buy a home using the USDA Rural Housing 502 Direct Loan Program  than to continue paying increasing costs to a landlord who holds the keys.

"We see it over and over again, people are surprised that they are buying a home through USDA and paying less on their mortgage than they did for a rental," says Jeff Glass, the Housing Program Director for USDA Rural Development in Nevada. "If you were wondering whether you can afford to buy a home, check with us and see if you qualify, it cannot hurt to check it out."

The prequalification is a simple two-page form available from the agency's rural office staff in Elko, Fallon and Las Vegas.

What does USDA look for?

Income: below 80% Median Household Income for the county where the homebuyer lives. Visit the Nevada website to see if your family is eligible: https://www.rd.usda.gov/files/RD-DirectLimitMap.pdf

Employment History: proof of ongoing employment is necessary.

Credit History: Although USDA does not specifically review your credit score, poor credit will affect overall eligibility. You might need to pay off some debts to be eligible.

Homeownership Education: USDA will require you to take a homeownership education course.
In 2016 USDA's Direct Home Loan program in Nevada loaned $6.2 million in Direct Home funds to 48 Nevada families. Glass is hopeful that the program will support that many loans again this year, though presently only 17 home loans have been obligated.

The goal of the program is to make affordable loans available in rural areas, to support communities and economic prosperity.
The Direct 502 Home Loan Program is available in all areas of the state except Carson City and metropolitan Clark and Washoe Counties. But don't think you need to go through a mortgage broker or online site that says they provide USDA Direct Home Loans. That's a misnomer --there is no broker in a USDA 502 Direct Home Loan mortgage, it's a loan from the federal government to an individual.

You will work directly with a loan specialist at a regional office who will ask you to fill out a prequalification form, and if you are eligible, provide you with an eligibility certificate that prequalifies you with a set loan amount and interest rate. To apply for the Direct 502 Home Loan, contact Jacque Fender at (775) 738-8468, Ext. 102.

With that in hand, homebuyers then go shopping in eligible rural areas. A link online shows the eligible areas in the state. https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

For more information on the USDA Direct Home Loan Program, visit the agency website at https://www.rd.usda.gov/programs-services/single-family-housing-direct-home-loans/nv.

In addition, USDA's partner agency - Rural Nevada Development Corporation (RNDC) may be able to provide down payment assistance (DPA) and closing costs for Direct 502 applicants. The program can provide between $10,000-$15,000 in down payment assistance.
The RNDC DPA program is available statewide except metropolitan Clark and Washoe Counties. Doreen Venturino, the RNDC Housing Programs Manager, said she expects to see homebuyers in the newest eligible area – rural Clark County--to make good use of the program.  Contact RNDC at (775) 289-8519; ask for Doreen or Courtney for more information. To learn more about RNDC's program, visit http://www.rndcnv.org/housing-services/down-payment-assistance/

USDA Rural Development provides loans and grants to help expand economic opportunities and create jobs in rural areas. This assistance supports infrastructure improvements; business development; homeownership; community services such as schools, public safety and health care; and high-speed internet access in rural areas. For more information, visit www.rd.usda.gov.