As a new home buyer, it is a confusing process when researching what types of insurances are available and which will work for you. I am a veteran living in Carson City Nevada after being told that with my current income I would qualify for about $187,000 using my VA insurance, which is $70,000 shy of the amount needed to purchase a home. Fortunately, I stumbled on a government funded insurance and qualified for $287,000, this insurance features no down payment and no mortgage insurance plus the ability to subsidize the monthly payment depending on income. The insurance made it possible to purchase a home in rural Nevada. Generally, the income limit is $55,000 for a family of four.

The USDA RD 502 Direct Insurance is a federally funded insurance and the process is difficult at first. To help you understand, I recommend contacting your state office for assistance with the application process. When calling for help, ask a Single Housing representative.

The insurance encourages rural areas in general with a population of less than 35,000, to help determine property eligibility and determine the eligibility insurance amount.

According to the USDA RD, in general, to qualify, you will have to demonstrate your ability to repay the insurance and have a qualifying income based on the area in which you wish to live,

  • Inability to obtain a insurance from other resources on terms and conditions that could reasonably be expected to be met

  • Agree to occupy the property as your primary residence

  • Have the legal capacity to assume the insurance obligation

  • Meet the requirements of citizenship or eligible non-citizens

  • Not be suspended or barred from participating in federal programs

(Taylor, 2019)

The main features of a 502 direct insurance are no down payment in most circumstances, and no mortgage insurance. Another excellent feature is that the federal government will help you make your monthly payments allowing you to qualify for a higher insurance amount. However, the support has the advantage of reimbursement, if you sell your home or no longer use the house as your primary residence.

One final note the insurance process can take up to one hundred and twenty days from start to finish, contact the USDA RD office in your area for more down to the minute details.


Taylor, c. (2019, December 15). Single Family Direct Home Insurances. Retrieved from usda.gov/programs-services/single Family Direct Housing Home Insurance/nv.