(423) 232-5097 eastern8cdc@e8cdc.org

USDA 502 Direct Loans

Used primarily to help low-income households purchase homes, USDA Direct 502 Loans offer mortgages in rural areas to low and very-low income applicants. It includes a 33 or 38 year term, depending on household income, with a current interest rate at 2.75% (APR 3.0%) but can receive government subsidy which could effectively reduce the rate to as low as 1.0%. Applicants may obtain 100% financing to purchase an existing home, purchase a site and construct a home, or purchase a newly constructed home located in a rural area.  Mortgage payments are fixed rate with no mortgage insurance required and based on the household’s adjusted income.

How to Check for Property Eligibility

To be eligible for a USDA 502 Direct Loan the property must be deemed rural by the USDA. To see if a prospective property is rural visit the USDA Income and Property Eligibility Site. Once there select “Single Family Housing Direct” then “Property Eligibility” and it will take you to a map where you can enter the address of the property.

Eastern 8 offers housing services for the 8 Northeastern Tennessee Counties of Carter, Greene, Hancock, Hawkins, Johnson, Sullivan, Washington and Unicoi.

**Manufactured Homes are not eligible**

Loan Information

Credit Score: A 640 credit score or an establishment of three alternative credit trade lines is required

Term: 33 or 38 term, depending on income.

Other Information: 100% financed fixed rate mortgage, payments based on income