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 Tennessee aren’t the same thing as USDA Section 502 Guaranteed Loans in Tennessee. The USDA Guaranteed Loan Program is more popular and accommodates a wider range of applicant incomes.

Can I get a USDA Direct Loan in Tennessee?

USDA Loan RequirementsUSDA Direct Loans in Tennessee 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 TN is $53,320, although that figure may vary from county to county. The maximum yearly income limits for Tennessee USDA Direct Loan approval are listed below. Other than meeting Tennessee 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 TN 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 TN 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 Tennessee?

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

Tennessee USDA Direct Loan Maximum Income Limits

1 Person
2 Person
3 Person
4 Person
5 Person
Bedford County, TN $42,650$42,650 $42,650$42,650 $56,300
Benton County, TN $42,000$42,000 $42,000$42,000 $55,450
Bledsoe County, TN $42,000$42,000 $42,000$42,000 $55,450
Campbell County, TN HUD Metro FMR Area $42,000$42,000 $42,000$42,000 $55,450
Carroll County, TN $42,000$42,000 $42,000$42,000 $55,450
Chattanooga, TN-GA MSA $54,250$54,250 $54,250$54,250 $71,600
Claiborne County, TN $42,000$42,000 $42,000$42,000 $55,450
Clarksville, TN-KY MSA $48,700$48,700 $48,700$48,700 $64,300
Clay County, TN $42,000$42,000 $42,000$42,000 $55,450
Cleveland, TN MSA $46,500$46,500 $46,500$46,500 $61,400
Cocke County, TN $42,000$42,000 $42,000$42,000 $55,450
Coffee County, TN $46,150$46,150 $46,150$46,150 $60,900
Crockett County, TN HUD Metro FMR Area $42,000$42,000 $42,000$42,000 $55,450
Cumberland County, TN $42,000$42,000 $42,000$42,000 $55,450
Decatur County, TN $42,000$42,000 $42,000$42,000 $55,450
DeKalb County, TN $42,000$42,000 $42,000$42,000 $55,450
Dyer County, TN $46,000$46,000 $46,000$46,000 $60,700
Fentress County, TN $42,000$42,000 $42,000$42,000 $55,450
Franklin County, TN $44,100$44,100 $44,100$44,100 $58,200
Gibson County, TN $42,000$42,000 $42,000$42,000 $55,450
Giles County, TN $43,100$43,100 $43,100$43,100 $56,900
Grainger County, TN HUD Metro FMR Area $42,000$42,000 $42,000$42,000 $55,450
Greene County, TN $44,100$44,100 $44,100$44,100 $58,200
Grundy County, TN $42,000$42,000 $42,000$42,000 $55,450
Hancock County, TN $42,000$42,000 $42,000$42,000 $55,450
Hardeman County, TN $42,000$42,000 $42,000$42,000 $55,450
Hardin County, TN $42,000$42,000 $42,000$42,000 $55,450
Haywood County, TN $42,000$42,000 $42,000$42,000 $55,450
Henderson County, TN $42,300$42,300 $42,300$42,300 $55,850
Henry County, TN $42,000$42,000 $42,000$42,000 $55,450
Hickman County, TN HUD Metro FMR Area $42,000$42,000 $42,000$42,000 $55,450
Houston County, TN $42,000$42,000 $42,000$42,000 $55,450
Humphreys County, TN $46,100$46,100 $46,100$46,100 $60,850
Jackson County, TN $42,000$42,000 $42,000$42,000 $55,450
Jackson, TN HUD Metro FMR Area $46,900$46,900 $46,900$46,900 $61,900
Johnson City, TN MSA $43,300$43,300 $43,300$43,300 $57,150
Johnson County, TN $42,000$42,000 $42,000$42,000 $55,450
Kingsport-Bristol-Bristol, TN-VA MSA $44,100$44,100 $44,100$44,100 $58,200
Knoxville, TN HUD Metro FMR Area $55,900$55,900 $55,900$55,900 $73,800
Lake County, TN $42,000$42,000 $42,000$42,000 $55,450
Lauderdale County, TN $42,000$42,000 $42,000$42,000 $55,450
Lawrence County, TN $42,000$42,000 $42,000$42,000 $55,450
Lewis County, TN $42,000$42,000 $42,000$42,000 $55,450
Lincoln County, TN $45,100$45,100 $45,100$45,100 $59,550
Macon County, TN HUD Metro FMR Area $42,000$42,000 $42,000$42,000 $55,450
Marshall County, TN $45,900$45,900 $45,900$45,900 $60,600
Maury County, TN HUD Metro FMR Area $51,750$51,750 $51,750$51,750 $68,300
McMinn County, TN $42,150$42,150 $42,150$42,150 $55,650
McNairy County, TN $42,000$42,000 $42,000$42,000 $55,450
Meigs County, TN $42,000$42,000 $42,000$42,000 $55,450
Memphis, TN-MS-AR HUD Metro FMR Area $52,700$52,700 $52,700$52,700 $69,550
Monroe County, TN $42,000$42,000 $42,000$42,000 $55,450
Moore County, TN $49,700$49,700 $49,700$49,700 $65,600
Morgan County, TN HUD Metro FMR Area $42,000$42,000 $42,000$42,000 $55,450
Morristown, TN MSA $44,700$44,700 $44,700$44,700 $59,000
Nashville-Davidson--Murfreesboro--Franklin, TN HUD Metro FMR $64,000$64,000 $64,000$64,000 $84,500
Obion County, TN $42,000$42,000 $42,000$42,000 $55,450
Overton County, TN $42,000$42,000 $42,000$42,000 $55,450
Perry County, TN $42,000$42,000 $42,000$42,000 $55,450
Pickett County, TN $42,000$42,000 $42,000$42,000 $55,450
Putnam County, TN $44,100$44,100 $44,100$44,100 $58,200
Rhea County, TN $42,400$42,400 $42,400$42,400 $55,950
Roane County, TN HUD Metro FMR Area $48,000$48,000 $48,000$48,000 $63,350
Scott County, TN $42,000$42,000 $42,000$42,000 $55,450
Sevier County, TN $46,800$46,800 $46,800$46,800 $61,800
Smith County, TN HUD Metro FMR Area $46,300$46,300 $46,300$46,300 $61,100
Stewart County, TN $45,050$45,050 $45,050$45,050 $59,450
Van Buren County, TN $42,000$42,000 $42,000$42,000 $55,450
Warren County, TN $42,000$42,000 $42,000$42,000 $55,450
Wayne County, TN $42,000$42,000 $42,000$42,000 $55,450
Weakley County, TN $43,900$43,900 $43,900$43,900 $57,950
White County, TN $42,000$42,000 $42,000$42,000 $55,450

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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