Rural Housing Programs

Assistance is available to purchase or build a single-family home, repairs for existing homeowners and development of affordable rental housing. This type of assistance is available in rural communities and small-incorporated towns/cities of up to 10,000 population. Some communities of between 10,000 to 20,000 populations may be eligible.

Programs are administered through our Local Offices

Home Ownership Loans (Section 502)

The agency has taken two approaches for the specific needs of very low and low-income households as well as the requirements of moderate-income households.

Direct Loans are made and serviced at subsidized rates and terms allowing very low and low income households the opportunity to obtain housing with no down payment requirement. Applicant Information

Guaranteed rural housing loans made and serviced by approved lenders address the needs of low and moderate income households. Commercial lenders utilize their underwriting criteria to make loans of up to 100 percent financing without private mortgage insurance. Guaranteed Income Limits

*NEW* MA State Supplement to HB-1-3550, Appendix 7. Homeowner Education Resources. May 7, 2007:
Rural Development requires that first time home-buyers complete homeowner education training prior to loan closing. The goal of this requirement is to have first time home-buyers financed under the Section 502 Direct program be well prepared for homeownership.  

There are many sources of homebuyer education. The link below will bring you to a spreadsheet that provides a listing of numerous sources of homebuyer education in the Southern New England. Some of the organizations may limit the number of classes, participants or area in which they cover. We have attempted to include recent and accurate information to assist you in selecting or finding a source of homebuyer education. First priority should be courses that are free or have fees less than $50. The cost of the homebuyer education is the responsibility of the applicant.

This list will be updated at least once a year. Some of the required criteria for acceptable training includes, whether there is a certificate of completion or other documentation of completion issued by the provider at the completion of the training and the training must be provided by homebuyer counselors that are certified by any of the following: (1) Department of Housing and Urban Development (HUD); (2) NeighborWorks America (NWA); (3)National Federation of Housing Counselors (NFHC); (4) State Housing Finance Agency or other qualified state organization; or (5) National American Indian Housing Council (NAIHC).

Upon completion it is expected that the trainees will be knowledgeable of the following areas: Preparing for homeownership; Budgeting (pre- and Post-Purchase); Credit Counseling; Shopping for a home; Lender differences (predatory lending); Obtaining a mortgage and the different type of mortgages; Loan closing processes; documentation and costs; Post-occupancy counseling and Life as a homeowner; warranties; and maintenance and repairs.
Homebuyer Education Resources (pdf file 25KB)

Guaranteed Rural Housing Newsletters 

Vol. 1, Issue 1, April 1, 2006: click here

Vol. 1, Issue 2, May 1, 2006: click here

Vol. 1, Issue 3, August 1, 2006: click here

Vol. 1, Issue 4, September 15, 2006 click here

Vol. 1, Issue 5, November 1, 2006 click here

Vol. 1, Issue 6, December 8, 2006 click here

Vol. 2, Issue 1, January 22, 2007 click here

Home Improvement and Repair Loans and Grants (Section 504)

Loans are available to very low-income homeowners to address general repairs to improve or modernize, weatherize and/or remove code violations. Loans are limited to a maximum of $20,000 scheduled for repayment in not to exceed 20 years at a rate of one percent interest. Grants are available up to $7,500 for senior citizens unable to afford a loan, but only for repairs and improvements that will remove health or safety hazards. Repairs may also be made to make the property accessible and useable for household members with disabilities.

Rural Rental Housing Loans

Rental housing authorities provide loan resources to public, profit and non -profit entities to create rental units in rural communities. These apartment complexes are designed to serve the needs of a specific community, to provide rental housing for elderly, family and mixed-use complexes.

Direct loans are made in eligible designated communities with RHS loan amounts seldom exceeding $1.0 million. The rents of the units financed are subsidized to assist very low and low-income tenants.

Guaranteed Loans: This program, like the direct loan program, is intended to fund construction of rental units. The Rural Housing Service guarantees up to 90 percent of the amount of a loan from a private lender to a housing developer. Occupants of the completed housing project must be very low to moderate-income households with income not in excess of 115 percent of the median of the surrounding area.

*Fiscal Year 2007 Designated Places List  

In Connecticut click here

In Massachusetts click here

In Rhode Island click here

Applications for Section 515 new construction loans will be accepted for listed communities only.  Communities on this list are considered equal with no regard to their order on the list.  Inclusion on this list does not indicate that a need or demand for Section 515 housing has been established.

Multi-Family Housing Newsletters 

Vol. 1, Issue 1, April 1, 2006: click here

Vol. 1, Issue 2, May 1, 2006: click here

Vol. 1, Issue 3, July 5, 2006: click here

Vol. 1, Issue 4, September 1, 2006 click here

Vol. 1, Issue 5, November 1, 2006 click here

Vol. 1, Issue 6, December 4, 2006 click here

Vol. 2, Issue 1, March 14, 2007 click here

Other Housing Assistance

Rural Development has many other programs that are funded at substantially lower levels or are available on a limited basis. Examples are Housing Preservation Grants, Farm Labor Housing, and Self Help Housing. Please contact your local office for additional information.

 Our national site contains more information on the following programs.

Direct Rural Housing
Guaranteed Rural Housing
Home Repair
Direct Rental Housing
Guaranteed Rental

  For program clarification on your specific eligibility please contact the Rural Development office near you: Local Assistance.

Rural Development - Southern New England Jurisdiction
For information about this web page, contact: Maril Alsup Stockwell at maril.stockwell@ma.usda.gov