8 months ago
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The U.S. Department of Agriculture (USDA) announced on Friday that it has lowered the interest rates for its single-family housing (SFH) direct home loan programs as of March 1, according to an email update sent out earlier this week.
Section 502 SFH Direct rates are now 4.5%, SFH non-program rates are now 5% and Section 524 rural housing site loans now have a 4.5% rate.
The Section 502 direct loan program, designed to assist low- and very-low-income applicants to obtain housing in eligible rural areas, provides payment assistance to “increase an applicant’s repayment ability” via a type of subsidy that can temporarily reduce the cost of a mortgage payment. The level of assistance is primarily determined by adjusted family income, according to the agency.
In February, the interest rate for the Section 502 SFH Direct program stood at 4.625%. The USDA’s SFH non-program interest rate is being lowered from 5.125% in February.
Rates are also being lowered by 0.125% on USDA’s Section 524 loans, which are made to “acquire and develop sites for low- or moderate-income families, with no restriction as to the method of construction,” the agency explains. For these loans, “low income” is defined as between 50% and 80% of the area median income, while the upper limit for moderate income is 115% of the area median income.
This past October, the White House announced its intent to launch a pilot program “to test alternative eligibility criteria related to community representation for Community Land Trust Organizations” through the USDA Section 502 program.
In June 2023, the USDA expanded Section 502 access to rural parts of Hawaii.
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