Rural Housing 502 Loan

Why Work With Me

Navigating a USDA Section 502 Rural Housing loan can feel overwhelming—but it doesn’t have to. As a local real estate professional with experience in USDA-approved properties and lenders, I help buyers in Santa Cruz, Pima, and Pinal Counties understand eligibility, program details, and property requirements to make homeownership achievable.

What Is a Rural Housing 502 Loan?

The USDA Section 502 program provides low-interest, government-backed loans for purchasing, building, or rehabilitating homes in eligible rural areas.

Key Benefits:

Low interest rates for qualified buyers
No down payment required for Direct Loans
Flexible credit guidelines
Option to finance repairs and improvements
Available for primary residences only

Helping Arizona Families Plant Roots in Rural Communities

The USDA Rural Housing 502 program is designed to help low- and very-low-income families achieve homeownership in rural areas. Borrowers must meet income and credit requirements, occupy the home as a primary residence, and purchase a property that meets USDA housing standards. Eligible properties are located in rural or suburban areas as designated by USDA. Program costs include a modest upfront guarantee fee and annual fee, which are generally lower than private mortgage insurance. With expert guidance, buyers can take advantage of 100% financing, low interest rates, and flexible repayment options to make homeownership achievable in Santa Cruz, Pima, or Pinal Counties, AZ.

Income Limits

Income limits vary by county, household size, and loan type. Approximate 2025 limits:

Santa Cruz County, AZ

1‑4 person household: $39,750 (Direct Loan)
5‑8 person household: $52,450 (Direct Loan)
Guaranteed Loan moderate income: 1‑4 persons $90,300, 5‑8 persons $119,200

Pima County, AZ

Guaranteed Loan moderate income: 1‑4 persons $90,300, 5‑8 persons $119,200

Note: Income limits are approximate. Exact limits depend on household size, program type (Direct vs Guaranteed), and property location. Always verify using the USDA eligibility tool.

Property & Housing Standards

Key Points:

Structurally sound and safe for occupancy
Functional utilities (water, electricity, sewage)
Free from environmental hazards
Adequate access to roads and essential services
Fit for year-round occupancy
Minor repairs may be required before closing

Eligibility Requirements

Key Points:

Must be a U.S. citizen or eligible non-citizen
Home must be primary residence
Household income must fall within USDA program limits
Must meet credit and repayment ability requirements
Property must be USDA-approved and meet housing standards

Area Eligibility

Rural Housing 502 loans are available only in USDA-approved rural areas.

Santa Cruz County, AZ:

Most areas are USDA-eligible
Eligible communities: Amado, Beyerville, Elgin, Patagonia, Rio Rico, Tubac

Pima County, AZ:

~92.5% of the county is eligible
Rural and suburban areas outside dense urban centers

Tip: Always confirm property eligibility using the USDA interactive map.

Fees and Costs

Fees and Costs Direct Loans (Low/Very Low Income Buyers):

No down payment required
Low interest rates set by USDA
Annual fee is modest and lower than conventional mortgage insurance

Guaranteed Loans (Moderate Income Buyers):

Upfront guarantee fee: 1% of loan (can be financed)
Annual fee: 0.35% of remaining loan balance
No private mortgage insurance (PMI) required

Owner Occupancy Requirement

Key Points:

Must occupy the home as primary residence
Typically, move-in within 60 days of closing
Cannot be used for vacation or rental properties
Verified by the lender before and sometimes after closing
Allows full 100% financing benefits

For more information for 502 Loans contact: USDA-Rural Development, 1131 S La Canada Suite 203, Patagonia, AZ 85614. Phone No. (520) 648-1769 Ext. 4. FAX No. 866-698-6278.