USDA Section 502 Guaranteed Loan Program (Delaware)

What is USDA Section 502 Guaranteed Loan Program (Delaware)?

USDA Section 502 Guaranteed Loan Program (Delaware) is a first mortgage for homebuyers in Delaware, administered by USDA Rural Development – Rural Housing Service (Single Family Housing Guaranteed Loan Program).

• The USDA Section 502 Guaranteed Loan Program enables approved private lenders to offer 100% financing (no down payment) to low- and moderate-income buyers purchasing a primary residence in eligible rural areas of Delaware. USDA provides a 90% loan note guarantee to reduce lender risk. Income cannot exceed 115% of area median income, and the loan is a 30-year fixed-rate first mortgage.
• 100% financing – no down payment required.
• 30-year fixed rate.
• No fixed minimum credit score (lender overlays may apply).
• Closing costs may be included in the loan.
• Can be combined with state/local DPA.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from Federal loan guarantee program under Section 502(h) of the Housing Act of 1949 (7 CFR Part 3555); USDA provides a 90% loan note guarantee to approved private lenders.

Do you have to pay it back?

USDA Section 502 Guaranteed Loan Program (Delaware) is a first mortgage and is repaid under the terms set by USDA Rural Development – Rural Housing Service (Single Family Housing Guaranteed Loan Program).

• The assistance is recorded in First position.
• Forgiveness and repayment terms are set by the program and can change — confirm them on the official program page before applying.

Who qualifies?

USDA Section 502 Guaranteed Loan Program (Delaware) is open to buyers who will live in the home as their primary residence.

What are the income limits?

USDA Section 502 Guaranteed Loan Program (Delaware) limits household income to 115% of the area median income, which varies by county and household size.

• Adjusted household income cannot exceed 115% of the area median household income for the county (per the USDA Guaranteed income-eligibility tables / eligibility site).
• The limit applies to total household income, not only the borrower’s.
• Area median income figures are published by HUD and updated annually, so check the current table for the county before relying on a number.

What kind of home can it be used for?

USDA Section 502 Guaranteed Loan Program (Delaware) can be used for Single Family, Condo, Townhouse, and Manufactured.

• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

USDA Section 502 Guaranteed Loan Program (Delaware) is a federal program, so it is not limited to Delaware.

How do you apply?

Applications for USDA Section 502 Guaranteed Loan Program (Delaware) go through USDA Rural Development – Rural Housing Service (Single Family Housing Guaranteed Loan Program), which publishes the current terms and the application steps on its own site.

1. 1

   Contact USDA Rural Development – Rural Housing Service (Single Family Housing Guaranteed Loan Program) to reserve funds

   Funds are reserved through Applications accepted on an ongoing basis (Oct 1 – Sep 30) through USDA-approved lenders., and are subject to availability.

2. 2

   Work with a lender who handles the program

   Hey Prescott is not a lender and does not accept applications; this page describes the program so a buyer can take it to a lender or housing counselor.