Confirmed by the Government | The USDA home loan of up to $324,700 that lets families buy a house with no down payment: who qualifies

Getting a loan is one of the most important financial decisions many Americans make. From buying a home to paying for repairs or covering unexpected expenses, there are federal and state programs that offer special conditions, such as lower down payments or more flexible requirements.

Home loans.Confirmed by the Government | The home loan that lets you add up to $75,000 in repairs to your mortgage: who can apply and how it works

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One of them is the Section 502 Direct Loan Program from the U.S. Department of Agriculture (USDA), which lends money directly to low- and very-low-income families so they can buy a home in eligible rural areas.

How much can you borrow from this loan

The amount depends on each family’s ability to repay and on the area loan limit of the county where the home is located. Since February 2026, the base limit in most rural counties is $324,700, although it is higher in more expensive areas. The USDA publishes the limits for each county on its official map.

The money can be used to buy, build, repair, or renovate a home, and even to prepare a lot, including water and sewer connections.

No down payment and rates as low as 1%

According to the USDA, no down payment is typically required, although applicants with assets above certain limits may have to use part of them.

Since October 1, 2026, the interest rate is 5.75%, but with payment assistance, a subsidy based on family income, it can drop to as low as 1%. Loans can last up to 33 years or 38 years for very low-income applicants.

Borrowers must repay all or part of that subsidy when they sell the home or stop living in it.

Who can apply for this loan?

Applicants must:

• Have an income at or below the low-income limit for their area.
• Lack decent, safe, and sanitary housing.
• Be unable to get a loan from other sources on reasonable terms.
• Live in the home as their primary residence.
• Meet citizenship or eligible noncitizen requirements.

The home must be in an eligible rural area and cannot be used to generate income.

How to apply

Applications are accepted year-round at local USDA Rural Development offices. Before applying, families can check whether an address qualifies and use a free self-assessment tool on the USDA eligibility website.

Processing times depend on available funding. In 2026, the USDA tightened some program rules and lowered limits in some counties, and when direct loan funds run out, applicants may be directed to the agency’s guaranteed loan program, offered through private lenders.