Grants and LoansĀ for Home Repairs for USA Low Income Rural Homeowners

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Government grants and loans exist for home repairs and safety hazard removal for USA low-income rural homeowners. This program is known as the Section 504 Home Repair program and are ongoing.  

The Section 504 Home Repair program provides loans to very-low-income homeowners to repair, improve, or modernize their homes or provides grants to elderly very-low-income homeowners to remove health and safety hazards. 

The USDA Rural Development Department offers these loans and grants because helping people stay in their own home and keep it in good repair helps families and their communities. Homeownership helps families and individuals build savings over time. It strengthens communities and helps many kinds of businesses that support the local economy.

Grants of up to $7,500 and low-interest loans of up to $20,000 are awarded to low-income homeowners in rural areas of the US, to improve their homes and address health hazards. The purpose of this program is to help people stay in their home and keep houses in good repair. Low-interest loans are available to repair, modernize, and improve homes. The grants available are for elderly homeowners with low incomes, primarily to remove health and safety hazards. 

Who may apply for this program?

To qualify, you must:
• Be the homeowner and occupy the house
• Be unable to obtain affordable credit elsewhere
• Have a family income below 50 percent of the area median income
• For grants, be age 62 or older and not be able to repay a repair loan

What is an eligible area?

Generally, rural areas with a population less than 35,000 are eligible.
Applicants may check the address of their home to determine eligibility online.

How may funds be used?
• Loans may be used to repair, improve, or modernize homes or to remove health and safety hazards.
• Grants must be used to remove health and safety hazards.

How much money can I get?
• Maximum loan is $20,000.
• Maximum grant is $7,500.
• Loans and grants can be combined for up to $27,500 in assistance.

What are the terms of the loan or grant?
• Loans can be repaid over 20 years
• Loan interest rate is fixed at 1%.
• Full title service is required for loans of $7,500 or more
• Grants have a lifetime limit of $7,500.
• Grants must be repaid if the property is sold in less than 3 years
• If applicants can repay part, but not all of the costs, applicants may be offered a loan and grant combination

Is there a deadline to apply?
Applications are available year round as long as funding is available, and are processed in the order they are received.

How long does an application take?
Approval times depend on funding availability in your area. Talk to a USDA home loan specialist in your area for help with the application.

To get started, contact a USDA home loan specialist in your area.

What law governs this program?
• The Housing Act of 1949 as amended, 7 CFR, Part 3550
• HB-1-3550 – Direct Single Family Housing Loans and Grants Field Office Handbook 

About the Author: The author is a staff writer for GrantWatch.com.

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