Section 502 Guaranteed Rural Home Loans

The United States Department of Agriculture (USDA) created the USDA Rural Development Guaranteed Housing Loan – also known as a section 502 Home Loan or USDA Loan – as a means to improve the livelihood of rural Americans.

Through this program, those who reside in what the USDA refers to as a “rural area” can reap the benefits of zero money down, 100% financing and access to highly competitive mortgage rates.


Though referred to as the USDA Loan, the USDA does not lend any money for the 502 Guaranteed mortgage but guarantees a portion of each loan in case of default. This plays a key role, by allowing lenders to take on more risk and the ability to offer eligible rural homeowners advantageous rates and terms.

Although this program is designed to boost the economy in rural areas, the USDA is very liberal on what they deem a “rural area.” This opens the program up for not only those who reside in rural areas, but also suburban areas and even suburbs of major metropolitan areas. The USDA Guaranteed Home loan has assisted thousands of homeowners in route to their dream home and continues to be one of the most advantageous programs on the market today.

Do I Qualify for the USDA Loan?

With the USDA Loan, there are certain home loan qualifications that must be met for the homeowner to be eligible. These qualifications include location, construction standards, income standards and cost limits, some of which can be confusing at times which is why it is best to talk to a USDALoans.com loan officer to help ensure you are qualified.

For initial eligibility, see our next section on USDA Home Loan eligibility.

Finding the right home to purchase using the USDA home loan guarantee program can be daunting. But knowing first-hand what you need to look for will help you shorten your shopping time – allowing you to move into a beautiful home soon!