The Section 502 Direct Loan Program, also known as USDA Direct Loans, is a program that aids low and very-low-income individuals purchase decent healthy, safe and clean housing in eligible rural areas. That’s accomplished though offering payment assistance which boosts a borrower’s capacity to repay. This payment assistance can be described as a form of subsidy that lowers the mortgage repayment for a brief period, and the amount of assistance is contingent upon the adjusted family income. USDA Section 502 Direct Loans in Minnesota aren’t the same thing as USDA Section 502 Guaranteed Loans in Minnesota. The USDA Guaranteed Loan Program is more popular and accommodates a wider range of applicant incomes.

Can I get a USDA Direct Loan in Minnesota?

USDA Loan RequirementsUSDA Direct Loans in Minnesota are low income loans that can be used to purchase homes in rural areas. To qualify for Direct Loans, applicants must have low or very low income, which is defined by the USDA as 50% to 80% of the Area Median Income (AMI). Like other rural housing loan programs, USDA Direct Loans are a mortgage with no down payment. The median income for the entire state of MN is $71,306, although that figure may vary from county to county. The maximum yearly income limits for Minnesota USDA Direct Loan approval are listed below. Other than meeting Minnesota USDA Direct Loan income limits, applicants must adhere to the following criteria to be eligible:

  • You have no decent clean, safe, and sanitary housing presently.
  • You can’t be able to get a mortgage from another source with terms and conditions that could reasonably expected to be met.
  • You must use this property for your primary residence.
  • You must possess the legal capacity to be able to contract a loan
  • You must meet citizenship or eligible noncitizen requirements.
  • You can’t be barred or suspended from participation in federal programs.

Additionally, the subject property must meet the following conditions:

  • Be a modestly sized home for that area.
  • Market value can’t be in excess of the areas applicable loan limit.
  • Can’t be designed for the production of income.

What areas in MN are eligible for USDA Direct Loans?

The property in question must be in an approved rural area. USDA Rural Development provides a webpage where you can search specific addresses in MN here.

How much can I borrow with a USDA Direct Home Loan?

The size of the mortgage that an applicant’s eligible for depends on their ability to repay. Rural Development takes into account income, assets, debt, and payment assistance when weighing eligibility for USDA Direct home loans. No matter what the repayment ability is, you can’t borrow more than the local loan limit for the county where the home is located.

Are there other mortgage options with low down payment or no down payment in Minnesota?

Yes, there may be other low down payment mortgage options, and no down payment mortgage options in Minnesota besides USDA Direct Loans. You can begin by researching Minnesota USDA Guaranteed Loans, Minnesota FHA Loans, and Minnesota VA Loans if you’re a veteran in MN or qualified family member. You may also want to look into helpful programs for down payment assistance in Minnesota.

Minnesota USDA Direct Loan Maximum Income Limits

1 Person
2 Person
3 Person
4 Person
5 Person
Aitkin County, MN $57,900$57,900 $57,900$57,900 $76,450
Becker County, MN $57,900$57,900 $57,900$57,900 $76,450
Beltrami County, MN $57,900$57,900 $57,900$57,900 $76,450
Big Stone County, MN $57,900$57,900 $57,900$57,900 $76,450
Brown County, MN $59,850$59,850 $59,850$59,850 $79,000
Cass County, MN $57,900$57,900 $57,900$57,900 $76,450
Chippewa County, MN $58,800$58,800 $58,800$58,800 $77,600
Clearwater County, MN $57,900$57,900 $57,900$57,900 $76,450
Cook County, MN $57,900$57,900 $57,900$57,900 $76,450
Cottonwood County, MN $57,900$57,900 $57,900$57,900 $76,450
Crow Wing County, MN $57,900$57,900 $57,900$57,900 $76,450
Douglas County, MN $61,050$61,050 $61,050$61,050 $80,600
Duluth, MN-WI MSA $57,900$57,900 $57,900$57,900 $76,450
Fargo, ND-MN MSA $67,300$67,300 $67,300$67,300 $88,850
Faribault County, MN $57,900$57,900 $57,900$57,900 $76,450
Fillmore County, MN HUD Metro FMR Area $58,800$58,800 $58,800$58,800 $77,600
Freeborn County, MN $57,900$57,900 $57,900$57,900 $76,450
Goodhue County, MN $65,700$65,700 $65,700$65,700 $86,700
Grand Forks, ND-MN MSA $66,300$66,300 $66,300$66,300 $87,500
Grant County, MN $57,900$57,900 $57,900$57,900 $76,450
Hubbard County, MN $57,900$57,900 $57,900$57,900 $76,450
Itasca County, MN $57,900$57,900 $57,900$57,900 $76,450
Jackson County, MN $59,200$59,200 $59,200$59,200 $78,150
Kanabec County, MN $57,900$57,900 $57,900$57,900 $76,450
Kandiyohi County, MN $57,900$57,900 $57,900$57,900 $76,450
Kittson County, MN $57,900$57,900 $57,900$57,900 $76,450
Koochiching County, MN $57,900$57,900 $57,900$57,900 $76,450
La Crosse-Onalaska, WI-MN MSA $62,900$62,900 $62,900$62,900 $83,050
Lac qui Parle County, MN $57,900$57,900 $57,900$57,900 $76,450
Lake County, MN $57,900$57,900 $57,900$57,900 $76,450
Lake of the Woods County, MN $57,900$57,900 $57,900$57,900 $76,450
Le Sueur County, MN HUD Metro FMR Area $64,550$64,550 $64,550$64,550 $85,200
Lincoln County, MN $57,900$57,900 $57,900$57,900 $76,450
Lyon County, MN $60,550$60,550 $60,550$60,550 $79,950
Mahnomen County, MN $57,900$57,900 $57,900$57,900 $76,450
Mankato-North Mankato, MN MSA $62,800$62,800 $62,800$62,800 $82,900
Marshall County, MN $58,300$58,300 $58,300$58,300 $76,950
Martin County, MN $57,900$57,900 $57,900$57,900 $76,450
McLeod County, MN $59,350$59,350 $59,350$59,350 $78,350
Meeker County, MN $59,300$59,300 $59,300$59,300 $78,300
Mille Lacs County, MN HUD Metro FMR Area $57,900$57,900 $57,900$57,900 $76,450
Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area $75,500$75,500 $75,500$75,500 $99,650
Morrison County, MN $57,900$57,900 $57,900$57,900 $76,450
Mower County, MN $57,900$57,900 $57,900$57,900 $76,450
Murray County, MN $58,250$58,250 $58,250$58,250 $76,900
Nicollet County, MN SEA $62,800$62,800 $62,800$62,800 $82,900
Nobles County, MN $57,900$57,900 $57,900$57,900 $76,450
Norman County, MN $57,900$57,900 $57,900$57,900 $76,450
Otter Tail County, MN $57,900$57,900 $57,900$57,900 $76,450
Pennington County, MN $57,900$57,900 $57,900$57,900 $76,450
Pine County, MN $57,900$57,900 $57,900$57,900 $76,450
Pipestone County, MN $57,900$57,900 $57,900$57,900 $76,450
Pope County, MN $59,050$59,050 $59,050$59,050 $77,950
Red Lake County, MN $59,100$59,100 $59,100$59,100 $78,000
Redwood County, MN $57,900$57,900 $57,900$57,900 $76,450
Renville County, MN $57,900$57,900 $57,900$57,900 $76,450
Rice County, MN $68,700$68,700 $68,700$68,700 $90,700
Rochester, MN HUD Metro FMR Area $75,050$75,050 $75,050$75,050 $99,050
Rock County, MN $57,900$57,900 $57,900$57,900 $76,450
Roseau County, MN $57,900$57,900 $57,900$57,900 $76,450
Sibley County, MN HUD Metro FMR Area $59,050$59,050 $59,050$59,050 $77,950
St. Cloud, MN MSA $61,050$61,050 $61,050$61,050 $80,600
Steele County, MN $62,800$62,800 $62,800$62,800 $82,900
Stevens County, MN $62,000$62,000 $62,000$62,000 $81,850
Swift County, MN $57,900$57,900 $57,900$57,900 $76,450
Todd County, MN $57,900$57,900 $57,900$57,900 $76,450
Traverse County, MN $57,900$57,900 $57,900$57,900 $76,450
Wabasha County, MN HUD Metro FMR Area $60,700$60,700 $60,700$60,700 $80,100
Wadena County, MN $57,900$57,900 $57,900$57,900 $76,450
Waseca County, MN $59,900$59,900 $59,900$59,900 $79,050
Watonwan County, MN $57,900$57,900 $57,900$57,900 $76,450
Wilkin County, MN $57,900$57,900 $57,900$57,900 $76,450
Winona County, MN $60,500$60,500 $60,500$60,500 $79,850
Yellow Medicine County, MN $57,900$57,900 $57,900$57,900 $76,450

More USDA Loan Resources

USDA Direct Loan Income Limits (Low Income)
USDA Direct Loan Limits (Low Income)

All USDA Loan Limits
All USDA Loan Income Limits
USDA Loan Requirements
USDA Loan Programs
USDA Loan Calculator

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