The United Sates Department of Agriculture (USDA) has two distinct programs; the 502 Direct Loan Program and the Guarantee Loan Program. The USDA provides 100% mortgage loans in rural areas to assist qualified individuals and households, whose gross adjusted income falls below the area median income (AMI), to purchase a home.
Income and household size typically determine which program works best for the applicant. Competitive and or below market interest rates, minimal closing cost and longer mortgage terms provide opportunity and affordability for many homeowners utilizing such programs. These loans are restricted to rural areas.