The Section 504 Home Repair Program is a government loan that helps qualifying homeowners pay for property repairs, renovations, and improvements. The US Department of Agriculture (USDA) also has a home renovation grant for select applicants who need funds to remove safety and health hazards.
Home improvement grants from the program are only available to owners who are 62 years of age or old and are unable to repay a loan. Grants typically do not need to be repaid unless the owner sells the property within three years.
Individuals who meet the income and other requirements may be able to receive a loan. Owners must repay the loan at a fixed 1 percent interest rate. Terms will vary by applicant, but borrowers may repay the loan up to a 20-year period.
State and local regulations may have additional requirements, but the federal requirements state loan applicants must be the owner and:
- Have a property that is in an eligible area.
- Occupy the home they own.
- Have a household income less than 50 percent of the area’s median.
- Be unable to get financing elsewhere.
Qualified homeowners may receive a loan up to $20,000 or a grant up to $7,500. Some applicants may get a loan-grant combination up to $27,500. In some locations, residents may get a higher amount as part of the Single Family Housing Section 504 Repair Pilot Program.
Grants have a lifetime limit of $7,500. So, applicants can apply multiple times for smaller amounts, but they will not receive more than the maximum.
The Section 504 Home Repair Program application does not have a deadline, and owners can apply to their local Rural Development office year-round. Processing times can depend on the office and funding available in the area.
Owners will need to submit the application, an authorization to release information, and a certification over employment and assets to apply for home improvement loans from the program. They will also need to submit evidence of ownership, pay stubs, and other financial documents to prove they qualify.
In some cases, applicants will need to submit homeowners insurance details or annual medical expenses. A USDA home loan specialist can review the needed documents and help with the application process.
Low-income homeowners in rural areas who need more than the Section 504 offers may be able to apply for more from a different government loan. Rural Home Loans can help families purchase or build a new home or make repairs and renovations. Learn more about the different ways qualified applicants can use these funds.