As a new home buyer, it is a confusing process when figuring out what types of loans are available and will work for you. I am a veteran living in Carson City, Nevada after being told that with my current income I could qualify for approximately $ 187,000 using a VA loan, which is $ 70,000 less than the amount needed to buy Houses. Luckily, I stumbled upon a government-funded loan of $ 287,000. There is no down payment or mortgage insurance on this loan, plus a monthly payment subsidy may be offered depending on income. The loan allowed him to buy a house in rural Nevada. Typically, the income limit is $ 55,000 for a family of four.

The USDA RD 502 Direct Loan is a federally funded loan and the process is difficult at first. To help you figure it out, I recommend contacting your state office for assistance with the application process. Contact your Single Housing representative for assistance.

The loan promotes rural areas with a population of less than 35,000 to help determine ownership and loan amount.

According to the USDA, in general, to be eligible, you need to demonstrate your ability to repay the loan and have an adequate income depending on the area in which you would like to live, and

  • Not be able to obtain a loan from other sources on terms that could reasonably be expected to be fulfilled.
  • Agree to take over the property as your primary residence
  • Capacity to assume credit obligations
  • Be eligible for citizenship or eligible non-citizenship
  • Cannot be removed from federal programs.

(Taylor, 2019)

The main features of the direct 502 loan are the absence of a down payment in most cases and the absence of mortgage insurance. Another great feature is the federal government will help you make a monthly payment, which will allow you to qualify for a higher loan amount. However, the subsidy has a repayment function if you sell your home or no longer use it as your primary residence.

One final note: the loan process can take up to one hundred and twenty days from start to finish, contact your USDA regional office for more details.


Taylor, J. (December 15, 2019). Direct home loans for single family housing… Retrieved from family home direct mortgages / NV.

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