USDA Section 504 Home Repair Loans and Grants

What this actually is

Two different things under one program number, and confusing them is the mistake that matters. The LOAN is money to repair or improve your home that you repay. The GRANT is money you do not repay, but it is available only to remove health and safety hazards and only to applicants who are 62 OR OLDER at the time of application — that age rule is in the regulation, and it is the thing most people find out too late. A homeowner of 58 who reads an article about "USDA home repair grants" is reading about something they cannot have yet; they can still get the loan. The other rule the advertising skips: you have to spend your own money first. Elderly families must apply net family assets over $20,000, and non-elderly families assets over $15,000, to reduce what they are asking USDA for — excluding the value of the home itself and a minimum adequate site.

Who qualifies, and what trips people up

Grant: age 62 or older at application, household adjusted income at or below the area's VERY low-income limit, and no ability to obtain credit elsewhere. Loan: same very-low-income limit, plus demonstrated repayment ability supported by a budget (a cosigner or another household member may join). Both require that you own and occupy the home, that you be unable to get help on reasonable terms from non-USDA credit or grant sources, that you have the legal capacity to take on the obligation, and that the asset test above be applied. An outstanding US federal court judgment (other than Tax Court) disqualifies you from a loan or grant. If you hold the property by lease rather than deed, the remaining lease term must be at least 5 years for a grant. Maximum loan and grant amounts are set by the agency and change — get the current figures from your USDA Rural Development office rather than from an article. Apply through that local office; nobody should charge you to do so.