USDA 502 Direct Loans in Kentucky & Beyond
Do you have good credit but limited income and aren’t sure if you can qualify for a home loan? Are you in need of safe housing? Ask us about the USDA 502 Direct Loan, which is tailor-made for borrowers just like you.
Is a USDA 502 Direct Loan Right For You?
Who It’s For
The USDA 502 Direct Loan is designed for homebuyers who have good credit but a limited income. With this program, which helps subsidize payments, you can get 100% financing for a USDA-eligible home in a rural area.
The Advantages
A Safe, Sanitary Home
You won’t have to worry that the home you’re living in is putting you in danger.
Payment Assistance
You’ll get help paying your mortgage every month with funds that subsidize your loan.
No Down Payment
100% financing is available to most applicants that qualify. Additional terms apply.
Your Home. Your Way.
Buy an existing home or have one built just the way you like. It’s up to you.
Eligibility at a Glance
Do you:
- Have a credit score of at least 640 (or three alternative credit trade lines)?
- Are without adequate housing but able to afford mortgage payments, including taxes and insurance (typically within 22% to 26% of your income)
- Plan to occupy the home as your primary residence?
- Meet the minimum income requirement and aim to purchase a home in a qualified area (you can check both by visiting the USDA website)
Then you may be eligible for a USDA 502 Direct Loan!
Take Your First Step
Does a USDA 502 Direct Loan sound like an amazing opportunity to own your own home? Fill out an application today!
USDA 502 DIRECT LOAN - FAQs
The goal of the USDA 502 Direct Loan program is to help those with limited income buy safe and sanitary housing in rural areas. Payment assistance is provided to the homebuyer and the amount of the subsidy is determined by the family’s adjusted income.
It’s important to note that all or part of the subsidy is required to be repaid by the borrower when the home is sold, or the borrower no longer lives in the home.
You can buy an existing single-family home, build a home, relocate a home, or repair and renovate a home. The home:
- Must be modest in size for the area it’s located in
- A market value that doesn’t exceed the area’s loan limit
- Cannot be designed to produce income
A down payment is not typically required, unless you have assets that go over the asset limit. In that case, you might be required to use a portion of those assets for a down payment.
You can visit the USDA website to check a home’s eligibility. Select the housing type at the top of the page, then type in the address and their search tool will tell you if it’s located in an eligible area.
The primary difference is who is funding the loan. With a USDA Direct Loan, the USDA is the lender. With a USDA Guaranteed Loan, a private lender funds the loan and the USDA backs it against default.
Helpful Tools
First-Time Home Buyers
Not sure where to begin? Follow our step-by-step guide and you’ll be in your new home in no time.
Calculators
How much home can you afford? Run the numbers with our handy loan calculators.
FAQs
Have questions about getting a loan? We’re happy to help! Get answers to the most common questions.
Words From Our Happy Homeowners
What We’re About
We’re a Kentucky mortgage lender that believes everyone deserves safe and affordable housing. Our overarching mission is to uplift communities throughout Central Appalachia and beyond, and we know that begins with ensuring everyone has a place to call home.
There’s a Loan for Everyone
USDA 502 Direct Loans
Do you have good credit but a limited income and want to live outside the city? Check out the USDA 502 Direct Loan.
USDA Guaranteed Loans
Are you interested in living in a rural area, and your income is moderate? Ask us about USDA-guaranteed loans.
FHA Loans
Need flexibility for your credit score and a lower down payment? Take a look at the popular FHA loan.
Conventional Loans
Do you have a solid credit score and are looking for great rates and options? Consider a conventional loan.
VA Loans
- Are you a U.S. military member or veteran? Find out how you can buy a home with no money down.
Specialty Programs
Do you have a unique situation? We offer a range of flexible loan programs to fit your needs.
