USDA Rural Development Section 502 Single Family Housing Guaranteed Loan
No down payment required for eligible buyers in USDA-eligible areas; financing up to 100% of appraised value plus the upfront fee
This is a 30-year fixed-rate mortgage from a USDA-approved lender, backed by a 90% USDA guarantee. Eligible buyers can finance the full appraised value plus the one-time upfront guarantee fee. There is no private mortgage insurance. Instead you pay USDA's upfront guarantee fee and a small annual fee added to your monthly payment. For federal fiscal year 2026 USDA set those at 1% upfront and 0.35% a year.
Funding was available the last time we checked.
Last verified Sep 23, 2026. Program terms change; confirm with the administrator before you rely on them.
At a glance
- Amount
- No down payment required for eligible buyers in USDA-eligible areas; financing up to 100% of appraised value plus the upfront fee
- Type of help
- Other help
- Where
- Nationwide
- Run by
- USDA Rural Development, Rural Housing Service
- First-time buyer
- Repeat buyers welcome
- Income limit
- Up to 115% of area median income
- Homebuyer education
- Not required
How the other help works
A special purchase path, discount, or loan type that lowers what you need at closing.
- Monthly payment: Yes
Who qualifies
- Repeat buyers welcome.
- Income. Household income at or below 115% of the area median income for the county, adjusted for household size. USDA's online eligibility tool checks your income and the property address at the same time (checked 2026-09-23).
- Property types: Single-family, Townhouse, Condo, Manufactured home meeting USDA rules. Must be your primary residence.
- The home must be in a USDA-eligible rural area. Most of Washington, the Baltimore core, and the inner suburbs are not eligible. Outer parts of the region often are. Check the exact address on the USDA map.
- The home must be modest, decent, safe, and sanitary, and you must live in it as your primary residence.
- USDA does not set a minimum credit score and allows alternative credit, but the lender you use sets its own standards.
- Gift funds and down payment assistance are allowed, so this loan can layer with state and local closing cost help.
How to apply
- 1Run the address and your household income through USDA's Income and Property Eligibility site. If either fails, the loan is off the table for that house.
- 2Get pre-approved with a USDA-approved lender. Not every lender does these, so ask up front.
- 3Shop in eligible areas. Ask your agent to filter for USDA eligibility so you do not fall for a house that does not qualify.
- 4Write the offer and complete the appraisal and any USDA-required property checks. The lender submits the file to USDA for a conditional commitment before closing.
- 5Close. The upfront guarantee fee is usually financed into the loan and the annual fee shows up in your monthly payment.
Watch out for
- Geography is the gate. In the DMV, eligible areas tend to be the outer counties and the rural edges of suburban counties, not the neighborhoods closest to DC or Baltimore. Always verify the address, since maps change after each census review.
- No down payment still means closing costs and prepaid items. Seller credits, gifts, and grants can cover those.
- The income cap is a household cap, counting everyone living in the home, not just the borrowers.
- USDA turnaround adds a step. Build a few extra days into your contract for USDA's conditional commitment.
- The annual fee stays for the life of the loan. Compare the total cost with FHA and conventional options before you commit.
If you are shopping toward Frederick, Southern Maryland, or the outer Virginia counties, always run the address through the USDA map. When it hits, this loan beats almost everything else on cash to close.
Straight answers
Which parts of Maryland, DC, and Virginia qualify?
Washington, DC and the close-in suburbs do not. Eligibility shows up in the outer, less dense parts of the region. The only way to know for a specific house is the USDA property eligibility map, which is free and takes a minute.
Do I have to be a first-time buyer?
No. You do need to live in the home as your primary residence and generally cannot own another adequate home nearby. Your lender will walk through the rules.
Is there mortgage insurance?
There is no private mortgage insurance. USDA charges an upfront guarantee fee, which can be financed, and an annual fee paid monthly. For fiscal year 2026 those were 1% and 0.35%.
Sources
- USDA Rural Development, Single Family Housing Guaranteed Loan Program (read Sep 23, 2026)
- USDA Rural Development, SFH Guaranteed Loan Program Overview 101 (January 2026) (read Sep 23, 2026)
- USDA, Income and Property Eligibility site (read Sep 23, 2026)
- Federal Register, OneRD annual notice of guarantee fee rates for fiscal year 2026 (read Sep 23, 2026)
Program details are summarized from public sources and change without notice. Funding badges reflect the last time we checked, not a guarantee of availability. This is buyer education from a real estate agent, not a loan pre-approval or a commitment to lend. Eligibility is decided by each program administrator and your lender. Equal Housing Opportunity.
Programs are the easy part. Timing is the hard part.
Most buyers lose assistance on a deadline, not on eligibility. Sean helps you map out the counseling, the lender conversation, and the contract dates so nothing slips.