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USDA Section 502 Single Family Housing Direct Home Loans (South Carolina)

USDA Rural Development · South Carolina

Last verified
See what you qualify forOfficial program site →
Income limit

80% AMI

Of area median income; varies by county and household size

What is USDA Section 502 Single Family Housing Direct Home Loans (South Carolina)?

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

  • USDA Rural Development's Section 502 Direct Loan Program provides low- and very-low-income rural homebuyers with a subsidized fixed-rate mortgage and payment assistance that can reduce the effective interest rate to as low as 1%. No down payment is typically required. The program assists applicants who cannot obtain credit elsewhere. As of May 1, 2026, the base interest rate is 5.00%. Payment assistance reduces actual payment based on adjusted family income. Property must be in USDA-eligible rural area in South Carolina.
  • No down payment typically required.
  • Interest rate as low as 1% with payment subsidy.
  • 33-38 year loan term.
  • Available year-round.
  • No pre-payment penalty.
  • Funds can also be used to build or renovate.
  • This is a federal program, so it is available beyond a single state or city.
  • Funding comes from USDA Rural Development federal appropriations.

Do you have to pay it back?

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

  • 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 Single Family Housing Direct Home Loans (South Carolina) is open to buyers who will live in the home as their primary residence.

The program requires

  • The home is occupied as a primary residence
  • Residency: Must be US citizen, permanent resident, or eligible noncitizen
  • DRAFT (dpa-gap-finder 2026-06-13): pending review. Applicants must demonstrate inability to obtain credit from other sources on reasonable terms. Cannot be suspended or debarred from federal programs. Payment assistance must be repaid (all or portion) when title transfers or borrower no longer occupies. Processing times vary by funding availability and demand. Contact SC USDA RD office for current waiting times. Applicants may use the USDA Self-Assessment Tool before applying at eligibility.sc.egov.usda.gov. Current rate effective May 1, 2026: 5.00% (check rd.usda.gov for updates).

The program excludes

  • Manufactured homes
  • Households above 80% of area median income

These are the program's own published rules, not a decision about any individual — the administering agency and a lender determine who actually qualifies.

What are the income limits?

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

  • Adjusted income must be at or below the low-income limit for the area (generally 80% AMI for low-income; very-low-income = 50% AMI). Payment subsidy further reduces payments. Specific SC county limits at rd.usda.gov/sites/default/files/RD-DirectLimitMap.pdf.
  • 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 Single Family Housing Direct Home Loans (South Carolina) caps the purchase price as follows: Cannot exceed applicable USDA area loan limit (varies by county in SC).

  • Eligible property types include Single Family.
  • New construction is eligible.
  • Manufactured homes are not eligible.

Where does it apply?

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

  • The program targets specific areas: USDA-designated rural areas in South Carolina (verify at https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do).

How do you apply?

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

  1. Contact USDA Rural Development to reserve funds

    Funds are reserved with the provider and are subject to availability.

  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.

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