Finance
A NC borrower who qualifies for a USDA Section 502 loan is most likely purchasing in:
AThe Charlotte urban core
BA rural or suburban area outside major metro areas, meeting USDA's eligible area and income requirements✓ Correct
CA federal housing project
DA coastal resort community
Explanation
USDA Section 502 loans are available in USDA-designated rural and eligible suburban areas; most major urban areas (Charlotte, Raleigh, Greensboro urban cores) do not qualify, but surrounding suburban and rural areas may.
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Key Terms to Know
Debt-to-Income Ratio (DTI)
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
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