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?
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?

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.
 
General Resources:
 
        •  Webinar on the Section 502 Direct Loan Program Basics
              •  Handout for this webinar
 
Applicant Resources:

Borrower Resources:

Rural Development Staff and Loan Application Packager Resources:
 
              ◦ Handout for eForms Webinar
              ◦ eForms User Guide for Intermediaries
        •   Stacking Order Checklist
        •   Upcoming loan application packaging training
            (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.
            ◦ Trainings will be posted once confirmed.

Interest Rates

Effective April 1, 2018, the current interest rate for Single Family Housing Direct Home Loans is 3.75% for low and very low income borrowers.

Contacts

ASHEVILLE AREA OFFICE

Pam Hysong, Area Director

84 Coxe Avenue, Suite 1E

Asheville, NC 28801 

828-254-0916

844-325-6823 Fax

Email: linda.whitmire@nc.usda.gov

Counties Served: Buncombe, Henderson, Transylvania

 

JEFFERSON SUB AREA OFFICE

134 Government Circle

Suite 201

Jefferson, NC 28640

336-246-2885

844-325-6823 Fax

Email: susan.roland@nc.usda.gov

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

 

FRANKLIN LOCAL OFFICE

195 Thomas Heights Rod

Franklin, NC 28734

828-524-3175

844-325-6823 Fax

Email: sharon.taylor@nc.usda.gov

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

 

MURPHY LOCAL OFFICE

225 Valley River Avenue, Suite J

Murphy, NC 28906

828-837-2721

844-325-6823 Fax

Email: sharon.taylor@nc.usda.gov

 

SPRUCE PINE LOCAL OFFICE

11943 S. 226 Hwy Suite D

Spruce Pine, NC 28777

828-765-0889

844-325-6823 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

704-471-0235

844-325-6850 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

336-767-0720

844-325-6850 Fax

Email: terry.goddard@nc.usda.gov

Counties Served: Forsyth, Alexander, Burke, Davie  

 

STATESVILLE LOCAL OFFICE

444 Bristol Drive

Statesville, NC  28677

704-872-5061

844-325-6850 Fax

Email: joshua.carswell@nc.usda.gov

Counties Served: Iredell, Catawba, Lincoln

 

DOBSON LOCAL OFFICE

220 Cooper Street

PO Box 66

Dobson, NC 27017

336-386-8751

844-325-6850 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

910-739-3349

844-325-6830 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

919-934-7156

844-325-6830 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

910-253-4448

844-325-6830 Fax

Email: paula.thrush@nc.usda.gov

Counties Served: Brunswick, New Hanover, Pender

 

ASHEBORO AREA OFFICE

Allen Hart, Area Director

847 Curry Drive, Suite 104

Asheboro, NC 27205

336-629-4449

844-325-6822 Fax

Email: saykorn.kannika@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

919-775-3407

844-325-6822 Fax

Email: margarita.marble@nc.usda.gov

Counties Served: Lee, Chatham, Moore

 

ROCKINGHAM LOCAL OFFICE

123 Caroline Street

Rockingham, NC  28379

910-895-3950

844-325-6822 Fax

Email: pamela.edwards@nc.usda.gov

Counties Served: Richmond, Montgomery, Anson, Union

 

HENDERSON AREA OFFICE

George Vital, Area Director

853 S. Beckford Drive, Suite A

Henderson, NC 27536

252-438-3134

844-325-6826 Fax

Email: hilda.hawkins@nc.usda.gov

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

 

WINTON SUB AREA OFFICE

County Office Building

305 W. Tryon Street

PO Box 8

Winton, NC 27986

252-358-7836

844-325-6826 Fax

Email: travis.lassiter@nc.usda.gov

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

 

HALIFAX LOCAL OFFICE

Halifax County Agriculture Complex

359 Ferrell Lane

Box 7

Halifax, NC 27839

252-583-7171

844-325-6826 Fax

Email: dora.thompson@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

252-526-9799

844-325-6827 Fax

Email: stephanie.davis@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

844-325-6827 Fax

Email: helen.gorham@nc.usda.gov

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