Would you love to make home improvements but find yourself short on cash? You may have more options than you realize.
You may be eligible for a low-income housing repair loan or grant. The Rural Housing Repair Loans and Grants program helps homeowners make necessary home repairs and modifications in an affordable manner. If you qualify for a grant, it's like free money. Ready to see how you may qualify?
What is the Low Income Repair Loan and Grant Program?
The United States Department of Agriculture (USDA) offers financial assistance to homeowners who live in a rural house and demonstrate financial need. Homeowners under the age of 62 may qualify for a home repair loan, whereas those over age 62 may qualify for a grant (no repayment required).
How Does the Program Work?
Loans of up to $20,000 are available, with a term of 20 years and a 1% interest rate. Any loan that exceeds $7,500 requires full title work and must use your home as collateral. A qualifying homeowner can use the loan proceeds to repair, renovate, or even modernize their home.
If you are over 62 years old, you may be eligible for a grant up to $7,500 but only for mandatory repairs that remove health or safety hazards. If you sell the home within three years of receiving the grant, some or all of the money may be eligible for repayment. You can combine both the USDA repair loan and grant for a total of $27,500 usable towards home repairs.
Who Qualifies for the Low Income Housing Repair Loan and Grant?
Only specific homeowners qualify for the Low Income Housing Repair Loan and Grant:
- You must occupy the property full-time
- You must be able to prove you are unable to obtain credit elsewhere
- Your household income must be less than 50% of the median income in the area
- The property must be located in an area the USDA determined as "rural."
Additionally, if you are over the age of 62, you must prove that you cannot qualify for a repair loan.
How to Apply
Apply for your low-income housing repair loan or grant in the local Rural Development office where the house is located. The Rural Development office offers two application options:
- Complete and send the application yourself
- Get assistance from a Section 504 packager (nonprofit group from the USDA)
The turnaround time varies depending on the number of applications submitted in your area. Ask your local RD office about their current turnaround time, as it can range from a few weeks to a few months.
The USDA helps those in rural housing renovate or repair their homes to keep homeowners in their homes while maintaining their part of the community. Homeownership is good for individual homeowners, and also benefits the economy overall. Keeping homeowners in their homes helps stimulate the local economy, strengthening it for individuals and business owners.
If you think you are eligible, contact your local RD office for more information on how you can get the funds you need for renovations or repairs.