USDA Direct Home Loan

What does this program do?

Also known as Section 502 Direct Loan Program, this program assists low income applicants obtain decent, safe and sanitary housing in eligible areas by providing payment assistance to increase an applicant's repayment ability, Payment assistant is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.

Eligibility:

Applicants must:

  • Be without decent, safe and sanitary housing
  • Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet
  • Agree to occupy the property as your primary residence
  • Have the legal capacity to incur a loan obligation
  • Meet citizenship or eligible non citizen requirements
  • Not be suspended or debarred from participation in federal programs
  • Minimum credit score of 620

Properties financed with direct loan funds must:

  • Be modest in size for the area
  • Not have market value in excess of the applicable area loan limit
  • Not have in-ground swimming pools
  • Not be designed for income producing activities

Maximum Household Income:


1 Person2 Persons3 Persons4 Persons5 Persons6 Persons7 Persons8 Persons
Low Income:$42,000$48,000$54,000$60,000$64,800$69,600$74,400$79,200


Loan Terms:

What is the interest rate and payback period?

  • Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
  • Interest rate when modified by payment assistance can be as low as 1%
  • Up to 33 year payback period - 38 year payback period for very low income applicants who can't afford the 33 year loan term

How much down payment is required?

No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.

For more information, contact the York County Housing Office at (757) 890-3885 or housing@yorkcounty.gov