USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi

What is USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi?

USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi is a first mortgage for homebuyers in Statewide County, Mississippi, administered by USDA Rural Development — Mississippi.

• The USDA Section 502 Single Family Housing Direct Loan Program provides direct government mortgage financing to low- and very-low-income households in eligible rural areas of Mississippi. The program offers payment assistance (subsidy) that reduces the effective mortgage rate to as low as 1% for very low-income borrowers. No down payment is typically required. Applications are accepted year-round through the local USDA Rural Development office in Jackson, MS. The loan can be used to purchase, build, repair, renovate, or relocate a home in an eligible rural area.
• No down payment typically required.
• Fixed rate as low as 1% with payment subsidy.
• Up to 38-year term for very low-income borrowers.
• Available for purchase, construction, or rehabilitation.
• Accepted year-round at local USDA RD office.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from Federal appropriations; USDA Rural Housing Service.

Do you have to pay it back?

USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi is a first mortgage and is repaid under the terms set by USDA Rural Development — Mississippi.

• Repayment is triggered by Borrower is required to repay all or a portion of the payment subsidy received over the life of the loan when title transfers or borrower no longer lives in the dwelling.
• 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 Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi is open to buyers who will live in the home as their primary residence.

What are the income limits?

USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi limits household income to 80% of the area median income, which varies by county and household size.

• Applicants must have adjusted income at or below the applicable low-income limit (generally up to 80% AMI) for the area where they wish to purchase. Very low-income borrowers (up to 50% AMI) receive maximum payment subsidy reducing effective rate to as low as 1%. Income limits vary by county; see USDA eligibility site.
• 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 Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi caps the purchase price as follows: Property must not have market value exceeding the applicable area loan limit for the county. No income-producing features allowed.

• Eligible property types include Single Family, New Construction, and Manufactured.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi is a federal program, so it is not limited to Mississippi.

How do you apply?

Applications for USDA Single Family Housing Direct Home Loans (Section 502 Direct) — Mississippi go through USDA Rural Development — Mississippi, which publishes the current terms and the application steps on its own site.

1. 1

   Contact USDA Rural Development — Mississippi to reserve funds

   Funds are reserved with the provider 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.