USDA funding available-Section 502 Direct Loan Program and 504 Repair and Rehabilitation Loan and Grant Programs

FUNDING AVAILABLE

 May 2017 – 502 and 504 one page fact sheet

May 2017 – PreQualFillForm

May 2017 – SFH502DirectBrochure

USDA has funding available for the Section 502 Direct Loan Program and 504 Repair and

Rehabilitation Loan and Grant Programs.

 

502 Direct loans are made directly by USDA Rural Development and are available to households

whose adjusted income does not exceed 80 percent of the area median. This is a subsided mortgage

program that can enhance an applicant’s purchasing power. Eligible applicants can obtain modest

and affordable housing by taking advantage of the direct program:

 

  • 100% financing
  • No down payment requirement
  • Fixed promissory note interest rate that considers the Treasury benchmark interest

rate (current rate is 3.25 percent)

  • Payment assistance that reduces the borrower’s mortgage payments to an effective

interest rate as low as one percent

  • Standard loan term of 33 years / 38 years (for those with incomes below 60% of AMI)

 

We encourage all potential direct loan applicants to have a pre-qualification screening to determine

if USDA can be the source for financing.

 

The attached pre-qualification package can be completed and sent to the USDA mail box at

nj.direct.origination@usda.gov to get the applicants started. We can assist and fast track the loan

process to eligible applicants.

 

504 Repair and Rehabilitation Loans and Grants are made directly by USDA Rural Development

and are available to homeowners’ whose adjusted income does not exceed the very-low income limits

for the area.

 

  • Must occupy the dwelling
  • Grant

o                    Homeowners who are 62 years and older and cannot repay a section 504 loan

o                    Grant up to $7,500

o                    Forgiven after 3 years

o                    Remove health and safety hazards

  • Loans

o                    Loans up to $20,000

o                    Loans up to 20 year loan term

o                    Interest rate 1%

o                    Modernize/Improvements to dwelling

 

Also attached, please find our brochures outlining USDA Rural Development 502 Direct Housing

Loan Program and one page 502 and 504 fact sheet. With joint efforts, we can market these

Programs and make USDA your “go to” source for financing.

 

If you have any questions, please contact us at 856-787-7700 ext. 4.