USDA 502 Loan Program

Updated 2026-05-17

The USDA 502 Loan Program is a core component of the Federal Housing Administration (FHA), specifically designed to assist low and very low-income individuals in rural areas in obtaining safe and affordable housing. It is administered by Rural Development (USDA) within the United States Department of Agriculture (USDA).

Purpose

The program aims to promote homeownership in rural communities by providing financing options to borrowers who may not qualify for traditional Conventional Loans. It is often used interchangeably with the broader term "USDA loan."

Eligibility and Requirements

To qualify for a USDA 502 loan, borrowers typically must:

• Be unable to obtain sufficient credit from another source.
• Agree to personally occupy the dwelling.
• Meet specific Income Eligibility Requirements (USDA), which are often tied to low and very low-income thresholds for the area.
• Purchase a property located within a USDA-designated rural area.

Relationship to SFHGLP

The USDA 502 Loan Program encompasses both direct loans (provided directly by the USDA) and guaranteed loans, such as those offered through the Single Family Housing Guaranteed Loan Program (SFHGLP) (SFHGLP). The SFHGLP is the more common form of USDA 502 lending, where the USDA guarantees loans made by approved private lenders.