Metro Community Development
503 S. Saginaw, Suite 804, Flint, MI 48502
Sarah Scheitler Phone: (810) 767-4622 ext. 400 or email@example.com
Metro Community Development
Program Status: Open
Program Factsheet: PDF
What does this program do?
Also known as the Section 502 Direct Loan Program, this program assists low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.
Who may apply for this program?
A number of factors are considered when determining an applicant’s eligibility for Single Family Direct Home Loans. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house and they must demonstrate a willingness and ability to repay debt.
- Be without decent, safe and sanitary housing
- Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet
- Agree to occupy the property as your primary residence
- Have the legal capacity to incur a loan obligation
- Meet citizenship or eligible noncitizen requirements
- Not be suspended or debarred from participation in federal programs
Properties financed with direct loan funds must:
- Generally be 2,000 square feet or less
- Not have market value in excess of the applicable area loan limit
- Not have in-ground swimming pools
- Not be designed for income producing activities
Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling.
Applicants must meet income eligibility for a direct loan. Please select your state from the dropdown menu above.
What is an eligible area?
Generally, rural areas with a population less than 35,000 are eligible. Visit the USDA Income and Property Eligibility website for complete details.
How may funds be used?
Loan funds may be used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
How much may I borrow?
The maximum loan amount an applicant may qualify for will depend on the applicant’s repayment ability. The applicant’s ability to repay a loan considers various factors such as income, debts, assets and the amount of payment assistance applicants may be eligible to receive. Regardless of repayment ability, applicants may never borrow more than the Area's Loan Limits (plus certain costs allowed to be financed) for the county in which the property is located.
What is the interest rate and payback period?
- Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
- Interest rate when modified by payment assistance, can be as low as 1%
- Up to 33 year payback period - 38 year payback period for very low income applicants who can’t afford the 33 year loan term
How much down payment is required?
No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.
Is there a deadline to apply?
Applications for this program are accepted through your local RD office year round.
How long does an application take?
Processing times vary depending on funding availability and program demand in the area in which an applicant is interested in buying and completeness of the application package.
What governs this program?
- The Housing Act of 1949 as amended, 7 CFR, Part 3550,
- HB-1-3550 - Direct Single Family Housing Loans Field Office Handbook
Why does USDA Rural Development do this?
USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low- and very-low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality. Providing these affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.
NOTE: Because citations and other information may be subject to change please always consult the program instructions listed in the section above titled "What Law Governs this Program?" You may also contact your local office for assistance.
Forms & Resources
• Webinar on the Section 502 Direct Loan Program Basics
• Handout for this webinar
• Applicant Orientation Guide video
• Form RD 3550-23, Applicant Orientation Guide - English version
• Form RD 3550-23, Applicant Orientation Guide - Spanish version
• Rural Development State Office contact information
• Customer Service Guide - English version
• Customer Service Guide - Spanish version
• Streamlined Assist Refinance Loan
• Intermediaries under the certified loan application packaging process
• Worksheet for Computing Income and Maximum Loan Amount Calculator (5/15/17 version)
• Tutorial on the Worksheet for Computing Income and Maximum Loan Amount Calculator
• Webinar on HB-1-3550 changes from Procedure Notice 492
• Handouts for this webinar
• Upcoming loan application packaging trainings (three-day classroom training with a registration fee) offered by the Housing Assistance Council, NeighborWorks, and the Rural Community Assistance Corporation in partnership with Rural Development:
Effective August 1, 2017, the current interest rate for Single Family Housing Direct Home Loans is 3.25% for low and very low income borrowers.
USDA RD State Office
3001 Coolidge Rd.
East Lansing, MI 48823
517-324-5190 | Fax 855-813-7741
Acting State Director
Community Programs Staff
Single Family Housing Staff
Business Programs Staff
Multi-Family Housing Staff
Gladstone Area Office
2003 Minneapolis Ave.
Gladstone, MI 49783
906-428-1060 Ext. 4
Sault Ste. Marie Office
Sault Ste. Marie, MI 49783
906-632-9611 Ext. 4
Traverse City Area Office
1501 Cass St., Suite A
Traverse City, MI 49684
231-941-0951 Ext. 4
West Branch Office
240 W. Wright St.
West Branch, MI 48661
989-345-5470 Ext. 4
Caro Area Office
1075 Cleaver Rd.
Caro, MI 48723
989-673-8173 Ext. 6
Grand Rapids Area Office
3260 Eagle Park Dr., Suite 107
Grand Rapids, MI 49525
616-942-4111 Ext. 6
Paw Paw Office
1035 East Michigan Ave., Suite A
Paw Paw, MI 49079
269-657-7055 Ext. 4
Mason Area Office
525 N. Okemos St., Suite B
Mason, MI 48854
517-676-1808 Ext. 4
1525 North Elms Rd.
Flint, MI 48532
810-230-8766 Ext. 4