The U.S. Department of Agriculture (USDA) Rural Development has money available for low interest homeownership loans. Section 502 Direct and Guaranteed loans provide low to moderate income individuals and families the opportunity to acquire, build, rehabilitate, or improve single family dwellings in rural areas.


Section 502 Direct Loans may be made for the purchase of an existing home or to build a new house. Funds may also be extended to repair or renovate a house being purchased through its program. The standard term for a Section 502 loan is 33 years, but 38- year loans may be considered for those who cannot afford a 33- year loan. Applicants may be eligible for payment assistance to reduce monthly payments.

To qualify for USDA Rural Development's Direct Loan Program, applicants must have a household income of less than 80 percent of the county median, have an acceptable credit history and have sufficient income to make the mortgage payment. The home purchased must be modest, in good repair, (or able to be repaired with loan funds) and located in an eligible rural area. Interested persons can distinguish if their area is considered rural by visiting

Section 502 Guaranteed Loans are available to moderate income families and individuals. Applicants apply to approved lenders and USDA Rural Development issues loan note guarantees to participating lenders. These loans are made for 30 years at a fixed interest rate. The lender may loan up to 101% of the appraised value, and closing costs and repairs can often be included in the loan. A down payment and private mortgage insurance is not required, but a 1.00% one-time guarantee fee is required at closing plus .35% annual fee.

For additional information regarding USDA Rural Development programs contact the Greenwich USDA Service Center at (518) 692-9940, Ext. 4 or visit