USDA Rural Development focuses on bettering the lives of individuals living in rural communities. One of the many ways this group achieves their mission is the Home Repair Loan and Grant program. The program provides grants and low-interest loans to families in rural parts of the country who are living in substandard conditions.
Money for rehabs
Purpose
The 504 Home Repair Loan and Grant Program was established to assist very low-income individuals and families living in rural areas with repairs to their existing homes. The loan and grant money is primarily intended to remove safety and health concerns. The money may also be used to make a home accessible for those with disabilities. Examples of qualifying projects include roofing, adding central heat, constructing a ramp for a wheelchair, adding running water or replacing an outhouse with an indoor toilet.
Qualifying
Applicants for grants must be older than 62 years of age and unable to obtain affordable credit through other means. Recipients must be 50 percent below the area median income, and the home must require safety or sanitary repairs.
Other low-income families, who are younger than 62 years of age may qualify for a loan at a 1 percent interest rate. These families must also demonstrate that they are considered very low-income and are unable to qualify for other affordable credit. Applicants for loans must show the ability to repay the loan based on scheduled payments.
Types
Home repair grants are for amounts up to $7,500. The funds may only be used to remove safety and sanitary hazards that make the house unlivable or to make the house handicap-accessible. Funds from grants may not be used for cosmetic purposes. Money from grants must be repaid in full if the house is sold within three years.
Home repair loans are made for up to $20,000 at a 1 percent interest rate for 20 years. Restrictions on the use of funds for loans are considerably more lenient. Loans can be used to modernize a home or make its use more convenient.
Low-income families can combine the two programs for a total of $27,500 in government assistance.
Restrictions
All work performed must meet local codes and standards. The home must not be in such disrepair that even with the improvements the home will continue to be a safety or sanitary hazard. Applicants must be U.S. citizens and must be both the owner and the occupant of the home.
Process
Submit an application through USDA Rural Development. If you qualify, an initial inspection of your property will be performed and a list of necessary repairs will be created. You will be required to secure a minimum of two bids from licensed contractors for the repairs. Rural Development will create a development plan for your property with detailed cost breakdowns and specifications of work to be performed. Once work has begun, multiple inspections will be performed, including a final inspection. All work will be inspected before payment is made to a contractor.
Tags: Rural Development, safety sanitary, affordable credit, from grants, grants must, home must
