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USDA Single Family Housing Direct Home Loan (Section 502 Direct)

USDA Rural Development (Vermont/New Hampshire State Office) · Concord, NH (serving VT), Vermont

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What is USDA Single Family Housing Direct Home Loan (Section 502 Direct)?

USDA Single Family Housing Direct Home Loan (Section 502 Direct) is a first mortgage for homebuyers in Concord, NH (serving VT), Vermont, administered by USDA Rural Development (Vermont/New Hampshire State Office).

  • The Section 502 Direct Loan Program helps low- and very-low-income applicants buy decent, safe, sanitary housing in eligible rural areas by providing payment assistance (subsidy) that can lower the effective interest rate to as little as 1%. No down payment typically required. Applicants apply directly through the USDA VT/NH RD office.
  • No down payment typically required; payment-assistance subsidy can reduce effective interest rate to as low as 1%; up to 33-year term (38 yrs for very-low-income); 100% financing.
  • This is a federal program, so it is available beyond a single state or city.
  • Funding comes from USDA Rural Development (federal).

Do you have to pay it back?

USDA Single Family Housing Direct Home Loan (Section 502 Direct) is a first mortgage and is repaid under the terms set by USDA Rural Development (Vermont/New Hampshire State Office).

  • Repayment is triggered by Subsidy recapture: borrowers repay all or part of the payment subsidy received when title transfers or the borrower no longer occupies the dwelling.
  • 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 Loan (Section 502 Direct) 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
  • 502 Direct is a subsidized first mortgage (closest enum). Recapture is subsidy recapture, not IRS MCC-style (recapture_tax=false). 4-person $ income limit varies by county - see linked VT income limits PDF.

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 Single Family Housing Direct Home Loan (Section 502 Direct) sets its income limit as follows: Adjusted income at or below the applicable low-income limit for the area (see VT 502 Direct income limits PDF). Subsidy amount based on adjusted family income.

  • 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 Single Family Housing Direct Home Loan (Section 502 Direct) can be used for single family and manufactured home (approved parks).

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

Where does it apply?

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

How do you apply?

Applications for USDA Single Family Housing Direct Home Loan (Section 502 Direct) go through USDA Rural Development (Vermont/New Hampshire State Office), which publishes the current terms and the application steps on its own site.

  1. Contact USDA Rural Development (Vermont/New Hampshire State Office) 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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