Rural Housing Direct Loans are loans that are directly funded by the Government.  These loans are made available for low- and very low-income households to obtain homeownership.  Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase an existing dwelling, or purchase newly constructed dwellings, located in rural areas.  Mortgage payments are based on the household's adjusted income.  These loans are commonly referred to as Section 502 Direct Loans.

Rural Development is working to eliminate substandard housing from rural America by helping rural people buy, build or rent decent housing. We also create jobs by funding the growth and creation of rural businesses and cooperatives. In a typical year, Rural Development programs create or preserve more than 150,000 rural jobs, enable 40,000 to 50,000 rural Americans to buy homes and help 450,000 low-income rural people rent apartments or other housing.

In order to be eligible for many USDA loans, household income must meet certain guidelines. Also, the home to be purchased must be located in an eligible rural area as defined by USDA.