Mortgage Navigator • USDA Home Loans

USDA Guaranteed vs. Direct

Both are USDA housing programs, but they are not the same loan.

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Section 502 Guaranteed

Made by an approved private lender. USDA provides a 90% loan note guarantee. The program serves low- and moderate-income households, uses a 30-year fixed-rate structure, and can provide 100% financing for eligible rural primary residences.

Section 502 Direct

Made directly by USDA Rural Development for low- and very-low-income applicants. Payment assistance can reduce the effective payment, and USDA says the assisted interest rate can be as low as 1% in qualifying cases.

Direct is not simply “better Guaranteed.” Direct has its own income rules, area loan limits, subsidy/recapture considerations, funding availability and application process through Rural Development.

Official USDA baseline

USDA Single Family Housing Programs · USDA Direct Home Loans · USDA Guaranteed Home Loans

USDA rules and income/property eligibility can change. The current USDA eligibility site, handbook, GUS result and approved lender requirements control the actual transaction.