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USDA Rural Development - Home Loans

Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. You may be surprised to learn that there are areas not far from Tucson that are considered to be in a rural area. The map below shows the areas near Tucson that are eligible for a USDA rural housing loan. Areas outside of the red border are in the eligible area.

Map of the Tucson, Arizona area

Notes:
  • The town of Sahuarita is a fast growing area that is inside the USDA rural housing area
  • Many parts of Vail and Marana are inside the USDA rural housing area
  • The new area of Corona de Tucson is inside the USDA rural housing area

Eligibility

Applicants for loans may have an income of up to $74,050 in the Tucson area. If there are more members in the household, the limits may be higher. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.

Terms

Loans are for 30 years. The promissory note interest rate is set by the lender. There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.

Standards

Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.

Approval

Rural Development officials have the authority to approve most Section 502 loan guarantee requests.

For more information:

USDA - Single Family Housing Loans