Rural Housing 502 Loan

USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low- and very-low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality. Providing these affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas.
Loan funds may be used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling.

Rural Housing Direct Loan Guidelines

502 loans facilitate the purchase of Single Family dwellings. In most cases, little or no down payment is required.

  1. Purchase an existing single family dwelling.
  2. May be used to rehabilitate an eligible dwelling.
  3. Purchase a lot and finance the construction of a dwelling (stick built, modular or manufactured) on the lot.
NOTE: Loan funds may not be used to rehabilitate manufactured homes, however, new manufactured homes placed on a permanent foundation are eligible with a 30 year repayment period.

  1. Applicant must have good credit. Includes all debts, rent and utility payments.
  2. Have a total income from all individuals residing in the household that is below
  3. the income limits (see below).
  4. Must have legal capacity to incur debt, and be 18 years of age or older
  5. Must be unable to obtain credit elsewhere.
  6. Must not be delinquent on any Federal debt (IRS, Student Loans, etc...).
  7. Must be able to show repayment ability for the proposed loan.
  8. Loan cannot exceed HUD Limits: $130,700.00 in Santa Cruz County; $153,000.00 in Pima County and Pinal County $134,500.00
  9. Must be below the income limits shown below.
  10. Applicants must participate in a homeownership training program.

County Income Limits

Family Size

Santa Cruz County

Pima County

Pinal County


$ 27,550.00

$ 33,800.00

$ 37,300.00


$ 31,500.00

$ 38,650.00

$ 42,650.00


$ 35,400.00

$ 43,450.00

$ 47,950.00


$ 39,350.00

$ 48,300.00

$ 53,300.00


$ 42,500.00

$ 52,150.00

$ 57,550.00


$ 45,650.00

$ 56,050.00

$ 61,850.00


$ 48,800.00

$ 59,900.00

$ 66,100.00


$ 51,950.00

$ 63,750.00

$ 70,350.00

For more information 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.