USDA Rural Development Home Loans (2026)
How the Section 502 Guaranteed Loan works for eligible rural buyers: income cap, no-down-payment financing, and the FY 2026 guarantee fees.
Every item cites an official USDA Rural Development source and the date we checked it. Last checked Nov 7, 2026.
Official, in effect What the Section 502 Guaranteed Loan does
USDA Rural Development's Single Family Housing Guaranteed Loan Program helps approved lenders make loans so low- and moderate-income households can buy, build, rehabilitate, improve or relocate a primary home in an eligible rural area. Eligible applicants can get 100% financing (no down payment) when they qualify. USDA gives the lender a 90% loan-note guarantee.
Applicants must: meet income eligibility (cannot exceed 115% of area median household income), agree to occupy the home as their primary residence, and be a U.S. citizen, U.S. non-citizen national or qualified alien. The home cannot be an income-producing property.
Source: USDA RD: Single Family Housing Guaranteed Loan Program · Checked Nov 7, 2026
Official, in effect Is my address rural enough?
Eligibility is by address, not by gut feel. USDA publishes an interactive map and address lookup. Enter the property address on the USDA Eligibility Site before you make an offer.
Source: USDA RD: Property Eligibility Site · Checked Nov 7, 2026
Official, in effect FY 2026 guarantee fees
For Fiscal Year 2026 (Oct 1, 2025 – Sept 30, 2026), USDA Rural Development's Conditional Commitment notice states an upfront guarantee fee of 1.00% and an annual fee of 0.35% of the average scheduled unpaid principal balance. The lender submits the upfront fee when it requests the Loan Note Guarantee.
- $250,000 loan, FY 2026 rates.
- Upfront fee: $250,000 × 1.00% = $2,500 (often financed into the loan).
- Annual fee: about 0.35% per year on the average scheduled unpaid balance (collected monthly).
Example numbers are for learning only. Your lender's figures will differ.
Source: USDA RD: Fiscal Year 2026 Conditional Commitment Notice · Checked Nov 7, 2026
Official, in effect Credit score, rates and term
USDA says the program has no credit-score requirement, but applicants must show a willingness and ability to handle debt. Interest rates are set by the lender (shop around). Terms are 30-year fixed rate only.
Source: USDA RD: Single Family Housing Guaranteed Loan Program · Program rules: 7 CFR Part 3555 · Checked Nov 7, 2026
Related tools and pages
All home-buying updates · FHA vs conventional (2026) · FHA loan limits & MIP · Conforming loan limits · VA funding fee
General information only. Not legal, tax or financial advice. RentToolkit is not a lender, law firm or financial adviser. Mortgage rules change often and lenders can add stricter rules of their own ("overlays"), so confirm with the official source and a licensed loan officer before you act.