Wisconsin USDA Loans

If you are a low or very low income family, you may think that owning a home is outside of your reach. However, if you happen to live in a rural area, this is not the case. The USDA loan program, also called Rural Housing Direct Loans or Section 502 Direct Loans, offers you a chance to own a home with the help of the government.

How the Loans Work

Section 502 Direct Loans are issued directly from the government. Qualified applicants can use the money to purchase a home, whether new or pre-owned, purchase land and build a home, rehabilitate or renovate a property, or relocate an existing home. The loans can also be used to purchase manufactured homes, provided they are permanent properties and meet HUD and HCFP guidelines.

Qualifications

Qualifying for the USDA loan program is a little tricky. If meet these qualifications, you likely can get one of these mortgages:

Income between 50 and 80 percent of the area median income, or below 50 percent
Family has no adequate housing
You can afford the mortgage payment, taxes and insurance (between 22 and 26 percent of your income)
You cannot get a home loan elsewhere
You have reasonable credit
Live in a qualifying rural area

If your meet these qualifications, consider applying for a USDA mortgage through your local Rural Development office. The application should be processed within 30 days.

Building Standards

The Section 502 program outlines specific standards for the properties it will consider for the home loan program. These include:

Modest in size, design and cost compare to other homes in the area
Contains no prohibited features
Meets national and state building codes
Meets HCFP thermal and site standards
Is permanently installed (for manufactured homes)
Meets HUD construction and safety standards

If necessary, some funds can be used to make the property meet these qualifications.

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