Free guide

I have a USDA home loan and I am behind. What are my options?

USDA Rural Development home loans come in two types: guaranteed loans made by a private lender, and direct loans made by USDA. Both may offer relief, such as forbearance, a loan modification, or help with past-due amounts. USDA rules changed recently, and we could not confirm every detail on USDA's own website, so always confirm your options with your servicer or USDA.

By Guillermo Serafin, broker and owner of Serve First Realty. Updated October 2026.

Which kind of USDA loan do I have?

  • A guaranteed loan is made by a private lender and guaranteed by USDA. Your servicer is usually a bank or loan company.
  • A direct loan, also called a Section 502 loan, is made and serviced by USDA itself.
  • If you are not sure, look at who sends your monthly statement, and ask them: "Is my loan a USDA guaranteed loan or a USDA direct loan?"

What help is there for a guaranteed loan?

Servicers of USDA guaranteed loans must review you for help, called loss mitigation. Options may include:

  • Special forbearance, which gives you time.
  • A loan modification.
  • A Mortgage Recovery Advance. USDA pays your past-due amount, and it becomes a second loan on your home with no interest.

These rules were updated by a USDA rule that took effect February 11, 2025, and a servicing notice dated February 23, 2026. To apply, call your servicer. The number is on your monthly statement.

What help is there for a direct loan?

  • Payment assistance. This is help with interest, based on your income, that lowers your monthly payment.
  • Other servicing relief for borrowers who are going through a hardship.
  • A COVID-era payment pause was offered in the past. We could not confirm that it is offered now, so do not count on it.

To ask about help, call the USDA Rural Development Customer Service Center. Call 800-414-1226, Monday through Friday, 7 a.m. to 5 p.m. Central Time. TTY users can call 800-438-1832. You can also visit USDA's Single Family Housing Programs page.

Why do you say to double-check everything?

When we researched this guide, USDA's website blocked automated checking. The details above come from recent USDA servicing notices and other sources, not from USDA's own pages. Program rules can change. Your servicer or USDA has the final word on what you qualify for.

What should I do now?

Watch out for scams

USDA help is free to apply for. California generally prohibits charging homeowners for loan modification or forbearance help before every promised service is fully done, and federal law adds more payment conditions. A real estate license does not create an exception. Only pay your mortgage to your real servicer. See our scam red flags guide.

General information, not legal advice. USDA program details could not be confirmed on USDA's website and may have changed. Confirm them with your servicer or USDA Rural Development. Sources: USDA Rural Development, Single Family Housing Guaranteed and Direct Loan Programs (rd.usda.gov); USDA final rule effective February 11, 2025; USDA servicing notice of February 23, 2026; 12 C.F.R. section 1024.41; California Civil Code section 2944.7.

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IMPORTANT NOTICE

Serve First Realty is not associated with the government, and our service is not approved by the government or your lender.

Even if you accept this offer and use our service, your lender may not agree to change your loan.

Asking for a guide or giving contact permission does not stop foreclosure or extend a deadline.

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