USDA Single Family Housing Repair Loans & Grants
Section 504: Financial Assistance for Very-Low-Income Rural Homeowners
Program Summary
The USDA Section 504 program provides critical financial assistance to very-low-income homeowners in eligible rural areas. The goal is to help residents repair, improve, or modernize their homes, and crucially, to eliminate health and safety hazards that could jeopardize their well-being.
$40,000
Maximum Loan Amount (1% interest)
$10,000
Maximum Grant Amount (Ages 62+)
$50,000
Combined Loan & Grant Maximum
2. Eligibility Requirements
Eligibility is strict, focusing on very-low-income households in USDA-designated rural areas.
A. Applicant Eligibility
| Requirement | Loan Program | Grant Program |
|---|---|---|
| **Age** | Must be the homeowner, no age requirement. | Must be **62 years of age or older** at the time of application. |
| **Income** | Must have a very-low-income (below 50% of the area median income). | |
| **Repayment Ability** | Must be unable to obtain affordable credit elsewhere, but demonstrate ability to repay the loan. | Must be unable to repay a loan. |
B. Property and Location Eligibility
- **Ownership:** The applicant must own and occupy the dwelling as their primary residence.
- **Location:** The home must be located in an eligible rural area designated by the USDA. (Verification is required via the USDA website.)
- **Use:** The property must not be used for income-producing purposes (e.g., rentals or business).
3. & 4. Interactive Details: Loan vs. Grant
Loan Details (Maximum $40,000)
- **Interest Rate:** Fixed at **1%** for the life of the loan.
- **Term:** Up to **20 years**.
- **Security:** The loan is secured by a mortgage on the property.
Eligible Loan Uses (Repairs, Improvements, Modernization)
- Major structural repairs (e.g., foundation, roofing).
- Adding or repairing wells and septic systems.
- Installing new heating, cooling, or electrical systems.
- Making the home accessible for a disabled person.
5. How to Apply
Follow these steps to navigate the application process:
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1.
Check Location Eligibility
Use the USDA Eligibility Map to ensure your property address is in a designated rural area. Only homes in these specific areas qualify.
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2.
Verify Income Status
Determine if your household income falls below the **very-low-income limit** for your specific county (50% of the area median income).
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3.
Contact a USDA Office
Reach out to your nearest USDA Rural Development (RD) state or area office. They will provide the official application forms and personalized guidance.
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4.
Submit Full Application
Provide all necessary documentation proving ownership, income, age (for grants), and detailed information regarding the necessary repairs.
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5.
Inspection and Approval
If approved, a USDA representative will conduct an inspection to confirm the scope of work and formally approve the funding amount before any work is authorized.
