What is a USDA direct home loan?
NationwideReviewed October 2026
A USDA direct home loan comes from USDA Rural Development itself and is for low- and very-low-income households that cannot get adequate credit elsewhere. The money can be used to buy, build, renovate, or relocate a home in an eligible rural area. That includes site preparation such as water and sewage facilities. The standard term is 33 years, or 38 years for very-low-income borrowers who need it. Payment assistance can bring the effective interest rate as low as 1%, depending on income. A down payment is typically not required. The loan amount cannot exceed the county's area loan limit. If the borrower sells, transfers the home, or stops living in it, some of the subsidy may have to be repaid.
Check your local rule. This varies by state, county or city. Your permitting office has the final word; the official lookup pages below show you who that is.