Buy or Build a Home with USDA

Ron Tackett
Release Date
Jun 15, 2015
Single Family Housing in California

This June, find out more about Rural Development’s Single Family Housing programs to make your dream of homeownership a reality. In honor of National Homeownership Month, USDA Rural Development California encourages rural California residents to contact their local Rural Development office for information on how to buy or build their own home. In 2014, Rural Development distributed over $25 million in Mutual Self-Help Housing loans to make rural homeownership possible for 166 vulnerable families in California. Throughout all of our housing work, we lent out $725 million across the Golden State in low-interest loans and guarantees to make mortgages affordable, fix leaky roofs and even help families build their own homes.

Four forms of assistance are available: the Guaranteed Rural Home Loan, the Direct Home Loan, a Repair Loan or Grant, and finally the Mutual Self-Help Housing Grant.

The Guaranteed Rural Home Loan assists approved lenders in providing low- and moderate-income households the opportunity to own adequate, modest, decent, safe and sanitary dwellings as their primary residence in eligible rural areas. Eligible applicants may build, rehabilitate, improve or relocate a dwelling in an eligible rural area. The program provides a 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural homebuyers. If you would like to purchase a home through this program, contact one of California’s Guaranteed Loan Coordinators.

The Direct Home Loan assists low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house and they must demonstrate a willingness and ability to repay debt. Interested applicants should contact their local Rural Development office for more information about eligibility and requirements for the program. 

Repair Loans and Grants, also known as Section 504 loans and grants, provides loans to very-low-income homeowners to repair, improve or modernize their homes or grants to elderly very-low-income homeowners to remove health and safety hazards. Contact a USDA home loan specialist in your area to learn more about repair assistance for your house.

Mutual Self-Help Technical Assistance Grants provide grants to qualified organizations to help them carry out local self-help housing construction projects. Grant recipients supervise groups of very-low- and low-income individuals and families as they construct their own homes in rural areas. The group members provide most of the construction labor on each other’s homes, with technical assistance from the organization overseeing the project. This cuts down on the construction cost of the home and makes each house more affordable for each family. If you would like to learn more about the Self-Help program, contact a local Rural Development office to find a qualified Self-Help organization near you. If you live in northern California, you may qualify through the Community Housing Improvement Program; along the North Coast, Rural Communities Housing Development Corporation; in Shasta and Thema Counties, Self Help Home Improvement Project, Inc.; along the Central Coast, Peoples’ Self-Help Housing; in the Central Valley and southern California, Self-Help Enterprises; and in Riverside and Imperial Counties, the Coachella Valley Housing Coalition.

To learn more about USDA’s observance of National Homeownership Month, please visit our Facebook page or contact a Rural Development State Office near you.

President Obama’s historic investments in rural America have made our rural communities stronger. Under his leadership, these investments in housing, community facilities, businesses and infrastructure have empowered rural America to continue leading the way – strengthening America’s economy, small towns and rural communities.