Program 101

Applications for this program are originated in the field office serving your county.  Select the Contacts tab above for the NC field office list.

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.

Applicants must:

  • 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?

Using the Single Family Housing Direct Eligibility Assessment tool, potential applicants may enter information online to determine if the Section 502 Direct Loan Program is a good fit for them prior to applying.  The tool will provide a preliminary eligibility determination after a potential applicant enters information on their general household composition, monthly income, monthly debts, property location, estimated property taxes, and estimated hazard insurance.  Potential applicants are welcome to submit a complete application for an official determination by USDA Rural Development (RD) regardless of the eligibility assessment results.  Upon receipt of a complete application, RD will determine the applicant’s eligibility using verified information and the applicant’s maximum loan amount based on their repayment ability and the area loan limit 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?

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

NOTE:  Please select your state using the "Select your location" menu above.  By doing so, any state specific forms and resources will be shown above this note. Please visit the Eligibility Site to find out if your income is within the direct loan limits.  Also, the home to be built or purchased must be located in an eligible rural area.
 
Applicant Resources:
 

Borrower Resources:

Customer Service Guide - English version
Customer Service Guide - Spanish version
Streamlined Assist Refinance Loan

Training Webinars and Handouts:

Program overview and handout
Pre-qualification and application processes and handout
Determining annual, adjusted, and repayment income and handout
Worksheet for computing income & max loan amount calculator
   • June 13, 2018 version of the worksheet
Credit requirements and handout
eForms electronic application process, handout, and user guide

Certified Loan Application Packager Resources:
 
Packagers are encouraged to routinely visit the Direct Loan Application Packagers page for information and resources specific to packaging single family housing direct loans.

Interest Rates

Effective November 1, 2018, the current interest rate for Single Family Housing Direct Home Loans is 3.50% for low and very low income borrowers.

Contacts

ASHEVILLE AREA OFFICE

Pam Hysong, Area Director

160 Zillicoa Street, Suite #2

Asheville, NC 28801

828-254-0916K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6823K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: linda.whitmire@nc.usda.gov

Counties Served: Buncombe, Henderson, Transylvania

 

JEFFERSON SUB AREA OFFICE

134 Government Circle

Suite 201

Jefferson, NC 28640

336-246-2885K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6823K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: susan.roland@nc.usda.gov

Counties Served: Ashe, Watauga, Alleghany, Wilkes, Caldwell

 

FRANKLIN LOCAL OFFICE

195 Thomas Heights Rod

Franklin, NC 28734

828-524-3175K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6823K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: pam.hysong@nc.usda.gov

Counties Served:  Macon, Haywood, Jackson, Cherokee, Clay, Graham, Swain

 

MURPHY LOCAL OFFICE

225 Valley River Avenue, Suite J

Murphy, NC 28906

828-837-2721K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6823K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: pam.hysong@nc.usda.gov

 

SPRUCE PINE LOCAL OFFICE

11943 S. 226 Hwy Suite D

Spruce Pine, NC 28777

828-765-0889K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6823K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: rebecca.pinto@nc.usda.gov

Counties Served: Mitchell, Yancey, Madison, Avery

 

SHELBY AREA OFFICE

Warren C. Smith, Area Director

844 Wallace Grove Road

Shelby, NC 28150

704-471-0235K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6850K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: kevin.oliver@nc.usda.gov

Counties Served: Cleveland, Gaston, McDowell, Polk, Rutherford, Mecklenburg

 

WINSTON SALEM SUB AREA OFFICE

Forsyth County Agriculture Building

Room 102

1450 Fairchild Drive

Winston Salem, NC  27105

336-767-0720K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6850K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: terry.goddard@nc.usda.gov

Counties Served: Forsyth, Alexander, Burke, Davie 

 

STATESVILLE LOCAL OFFICE

444 Bristol Drive

Statesville, NC  28677

704-872-5061K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6850K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Counties Served: Iredell, Catawba, Lincoln

Email: kevin.oliver@nc.usda.gov

 

DOBSON LOCAL OFFICE

220 Cooper Street

PO Box 66

Dobson, NC 27017

336-386-8751K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6850K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: debbie.dickerson@nc.usda.gov

Counties Served: Surry, Yadkin, Stokes

 

LUMBERTON AREA OFFICE

Rossie Bullock, Area Director

PO Box 7426

440-C Caton Road

Lumberton, NC 28360

910-739-3349K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB
844-325-6830K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email:laci.fett@nc.usda.gov

Counties Served: Robeson, Bladen, Cumberland, Scotland, Hoke, Columbus

 

SMITHFIELD SUB AREA OFFICE

Johnston County Agric Service Bldg

2736 Hwy 210

Smithfield, NC 27577

919-934-7156K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6830K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: lacia.flakes@nc.usda.gov

Counties Served: Johnston, Harnett, Sampson, Wake, Wilson

 

BOLIVIA LOCAL OFFICE

10 Referendum Drive

PO Box 108

Bolivia, NC  28422

910-253-4448K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6830K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: paula.thrush@nc.usda.gov

Counties Served: Brunswick, New Hanover, Pender

 

ASHEBORO AREA OFFICE

847 Curry Drive, Suite 104

Asheboro, NC 27205

336-629-4449K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6822K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: cody.smith@nc.usda.gov

Counties Served: Guilford, Randolph, Davidson, Rowan, Stanly, Cabarrus, Rockingham, Caswell, Alamance

 

SANFORD LOCAL AREA OFFICE

2416 Tramway Road

Ernest & Ruby McSwain Extension Educ & Ag Center

Sanford, NC 27332

919-775-3407K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6822K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: margarita.marble@nc.usda.gov

Counties Served: Lee, Chatham, Moore

 

ROCKINGHAM LOCAL OFFICE

123 Caroline Street

Rockingham, NC  28379

910-895-3950K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6822K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: pamela.edwards@nc.usda.gov

Counties Served: Richmond, Montgomery, Anson, Union

 

HENDERSON AREA OFFICE

853 S. Beckford Drive, Suite A

Henderson, NC 27536

252-438-3134K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6826K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: tara.brooks@nc.usda.gov

Counties Served: Vance, Granville, Franklin, Warren, Orange, Durham, Person, Nash, Northampton

 

WINTON SUB AREA OFFICE

County Office Building

305 W. Tryon Street

PO Box 8

Winton, NC 27986

252-358-7836K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6826K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: travis.lassiter@nc.usda.gov

Counties Served: Hertford, Gates, Chowan, Pasquotank, Perquimans, Camden, Currituck, Bertie

 

HALIFAX LOCAL OFFICE

Halifax County Agriculture Complex

359 Ferrell Lane

Box 7

Halifax, NC 27839

252-583-7171K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6826K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: ed.james@nc.usda.gov

Counties Served: Halifax

 

KINSTON AREA OFFICE

Aaron Gaskins, Area Director

2044-C Hwy 11/55 South

PO Box 6189

Kinston, NC 28501-0189

252-526-9799K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB

844-325-6827K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: stephanie.hardison@nc.usda.gov

Counties Served: Lenoir, Jones, Craven, Pamlico, Onslow, Carteret, Wayne, Greene, Duplin

 

GREENVILLE SUB AREA OFFICE

Pitt County Office Complex

403 Government Circle, Suite 3

Greenville, NC 27834

252-752-2035/252-752-2880

844-325-6827K87N8hDcQTTKKFTioSxqB8Q2BNX5JtAljwgAAAAB Fax

Email: Lisa.Yocum@nc.usda.gov

Counties Served: Pitt, Martin, Washington, Tyrrell, Dare, Beaufort, Hyde, Edgecombe