USDA Section 502 Guaranteed Rural Housing Loan (Montana)

What is USDA Section 502 Guaranteed Rural Housing Loan (Montana)?

USDA Section 502 Guaranteed Rural Housing Loan (Montana) is a first mortgage for homebuyers in Montana, administered by USDA Rural Development (via approved lenders).

• The USDA Section 502 Guaranteed Loan helps low- and moderate-income Montanans buy modest homes in eligible rural areas with no down payment. USDA Rural Development guarantees up to 90% of the loan to an approved lender, enabling 100% financing at a 30-year fixed rate. Household income may not exceed 115% of area median income, and a 1.0% upfront plus 0.35% annual guarantee fee apply. This is distinct from the Section 502 Direct program (which RD funds and services directly).
• No down payment (100% financing).
• Lower guarantee fees than FHA MIP.
• Flexible credit.
• 30-year fixed.
• Up to 115% AMI eligibility.
• This is a federal program, so it is available beyond a single state or city.
• Funding comes from USDA Rural Development loan-note guarantee to approved lenders.

Do you have to pay it back?

USDA Section 502 Guaranteed Rural Housing Loan (Montana) is a first mortgage and is repaid under the terms set by USDA Rural Development (via approved lenders).

• Repayment is triggered by Standard amortizing 30-year fixed mortgage.
• The assistance is recorded in 1st 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 Rural Housing Loan (Montana) is open to buyers who will live in the home as their primary residence.

What are the income limits?

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

• Adjusted household income may not exceed 115% of the area median income for the county; limits vary by county and household size (verify on USDA income-limit lookup).
• 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 Rural Housing Loan (Montana) caps the purchase price as follows: No set purchase-price limit; loan based on appraised value/repayment ability. Home must be modest.

• Eligible property types include Single-family residence (modest, primary residence) in eligible rural area.
• New construction is eligible.
• Manufactured homes are eligible.

Where does it apply?

USDA Section 502 Guaranteed Rural Housing Loan (Montana) is a federal program, so it is not limited to Montana.

• The program targets specific areas: Only USDA-designated rural areas of Montana are eligible.

How do you apply?

Applications for USDA Section 502 Guaranteed Rural Housing Loan (Montana) go through USDA Rural Development (via approved lenders), which publishes the current terms and the application steps on its own site.

1. 1

   Contact USDA Rural Development (via approved lenders) to reserve funds

   Funds are reserved through Apply through USDA RD-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.