If you’re a low-income senior homeowner struggling with the cost of essential home repairs, you may qualify for a $10,000 grant for home improvement through the USDA Section 504 Home Repair Program. This federal program also offers very low-interest loans to help make home improvements more affordable. Here’s everything you need to know about qualifying for the program.
Key Points To Know About The Section 504 Home Repair Program
The USDA Section 504 Single Family Housing Repair Loans and Grants program helps very low-income homeowners in rural areas repair, improve, or modernize their homes. The program has two components:
- Free grants for homeowners for repairs: Up to $10,000 in free money (no repayment required) for seniors 62 and older. The grant increases to a maximum of $15,000 if you live in a presidentially declared disaster area.
- Low interest loans: Low-interest loans up to $40,000 for qualifying homeowners of any age. The current interest rate for USDA home improvement loans is fixed at 1%. You don’t need a down payment for the loan.
- Funding can be combined, meaning you could potentially receive both a grant and a loan for the same project if you meet the eligibility requirements.
- If you sell your home within 3 years of receiving a home repair grant, the funds will need to be repaid.
- Section 504 home repair grants are considered taxable income, so it’s important to plan for a potential tax liability.
Who Qualifies For The Free $10,000 Home Improvement Grant?
To qualify for the grant portion of the program, you must meet all of these requirements:
- You must be 62 years old or older
- You must be a U.S. citizen or permanent resident
- Your household income must be at or below the very low income limit for your area. This is typically 50% of the median income for your county.
- You must own and occupy the home as your primary residence
- The property must be in a USDA-designated rural area (this includes many small towns and suburban areas, not just farms)
- You cannot have sufficient resources to pay for the repairs yourself
- You cannot have access to affordable credit you could use to fund the repairs
- The grant funds can only be used to remove health and safety hazards from your home
Who Qualifies For The Home Improvement Loan Program?
These are the eligibility requirements for the USDA home improvement loan program:
- No age requirement (available to homeowners of any age)
- You must be a U.S. citizen or permanent resident
- Your household income must be at or below the very low income limit for your county
- You don’t qualify for other affordable credit to finance the repairs or improvements
- You have enough income to make the monthly loan repayment
- You must have an acceptable credit history
- You must own and occupy the home as your primary residence
- The property must be in a USDA-designated rural area
- Loans must be repaid over a period of up to 20 years
To check if your income qualifies for a home repair grant or a loan, follow these steps:
- Go to https://www.rd.usda.gov/sites/default/files/RD-DirectLimitMap.pdf
- Select your state
- Look through the alphabetized list to find your county
- Look at the income limit shown for Very Low Income
What Can You Use The Money For?
The rules covering what you use the money for depend on whether you’re applying for a grant or a USDA home improvement loan.
The $10,000 grant for home improvement may only be used for repairs and improvements that will remove health and safety hazards, or to make modifications for a household member with a disability. Grant money cannot be used for general improvements or modernization.
Acceptable uses for grant money include:
- Replacing a failing septic system that poses a health risk
- Fixing dangerous electrical wiring that could cause fires or shocks
- Repairing or replacing a leaking roof that causes water damage and mold
- Installing a wheelchair ramp for accessibility
- Replacing a toilet with a raised-height toilet for safety reasons
- Converting a bathtub to an accessible shower to prevent falls
- Fixing unsafe stairs or adding handrails
- Addressing lead paint hazards
- Repairing or replacing a failing water well
- Fixing drafts to make a home warmer in winter
- Adding disability accessibility features like safety handles, wider doors, bathroom facilities, kitchen modifications, non-slip flooring, etc.
Non acceptable uses for grant money include:
- Replacing a functioning but outdated bathroom suite simply for appearance
- Installing new flooring that’s just worn but not hazardous
- Painting for cosmetic purposes
- Adding a deck or patio
- Kitchen upgrades that aren’t health or safety related
Your area Rural Development field office can help you figure out if your repairs will qualify for a grant.
USDA Home Improvement loans can be used for a wider range of home improvements, including:
- General repairs and modernization
- Energy efficiency improvements
- Accessibility modifications
- Kitchen and bathroom updates
- HVAC system repairs or replacement
- Roof repairs or replacement
- Plumbing and electrical improvements
What Counts As A Rural Area?
Your home must be located in a USDA-designated rural area. This might include areas you wouldn’t typically consider “rural,” including:
- Small towns and cities with populations under 20,000
- Some suburban areas outside major metropolitan areas
You can check if your address qualifies by visiting the USDA Rural Development website and searching for your address on their eligibility map.
USDA property eligibility map: https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
How To Apply For Single Family Home Repair Loans and Grants?
The first step is contacting your county’s Rural Development field office. Alternatively, you can contact a USDA home loan specialist. They’ll answer any quotations you have, explain exactly how the program works, and help you complete your application.
- Find your Rural Development field office: https://offices.sc.egov.usda.gov/locator/app.
- Find a USDA loan advisor: https://www.rd.usda.gov/browse-state
Once you submit your application, your information will be reviewed and staff will verify your income, age, credit report, property ownership, property location, and contractor’s repair estimate and specifications.
A USDA representative may also visit your home to assess its condition.
The full grant and loan approval process can take a few weeks to several months to complete, and all repairs must be approved before any work begins.
Grants from the Section 504 home repair program help thousands of senior homeowners make their homes safer and more comfortable every year. And when combined with low interest home improvement loans for seniors, a grant makes those essential repairs and upgrades affordable, ensuring you can continue living safely and independently in your own home.
Read Also: $7,500 single mother grant and how to apply?
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