What does this program do?
The Section 504 Home Repair Loans & Grants in Presidentially Declared Disasters Pilot program provides loans and grants to very-low-income homeowners to repair disaster related damage caused to their homes. For more information, please visit the Federal Register notice published, Tuesday, July 18, 2023.
A correction to this notice was published in the Federal Register on September 6, 2023 that expands the pilot to any presidentially declared disaster areas that occurred on or after July 18, 2022 (i.e., is not limited to the pilot states outlined in the original notice), until the conclusion of the pilot on July 18, 2025.
Who may apply for this program?
To qualify, you must:
- Have disaster related damage to your home cause by a Presidentially Declared Disaster on or after July 18, 2022
- Be the homeowner and be able to occupy the house within 12 months
- Have a household income that does not exceed the very low limit by county
What is an eligible rural area?
Utilizing the USDA Eligibility Site you can enter a specific address for determination or just search the map to review general eligible areas.
How may funds be used?
Loans and Grants may be used to repair disaster related damages caused by a Presidentially Declared Disaster on or after July 18, 2022. Cost incurred prior to the application may be eligible if the purpose of the expense was to repair disaster related damage. To pay for the cost to move a manufactured home to the property.
How much money can I get?
- Maximum loan is $40,000
- Maximum grant is $40,675
- Loans and grants can be combined for up to $80,675 in assistance
What are the terms of the loan or grant?
- Loans are termed for 20 years
- Loan interest rate is fixed at 1%
- Full title service is required if the total outstanding balance on Section 504 loans is greater than $25,000
- Grants have a lifetime limit of $40,675
- Grants must be repaid if the property is sold in less than 3 years
Is there a deadline to apply
- Applications for this program are accepted through your local RD office year round
How long does an application take?
Approval times depend on funding availability in your area. Talk to a USDA home loan specialist in your area for help with the application
Who can answer questions and how do I get started?
Contact a USDA home loan specialist in your area.
What governs this program?
- The Housing Act of 1949 as amended, 7 CFR Part 3550
- HB-1-3550 - Direct Single Family Housing Loans and Grants Field Office Handbook
Why does USDA Rural Development do this?
Helping people stay in their own home and keep it in good repair helps families and their communities. Homeownership helps families and individuals build savings over time. It strengthens communities and helps many kinds of businesses that support the local economy.
NOTE: Because citations and other information may be subject to change, please always consult the program instructions listed in the section above titled "What Governs this Program?" Applicants may also contact your local office for assistance.
NOTE: Please select your state using the "Select your location" menu above. By doing so, any state specific forms and resources will be shown above this note.
Applicants interested in applying for a repair loan or grant can contact their local Rural Development office and provide the following documentation:
- Form RD 410-4, Uniform Residential Loan Application
- Form RD 3550-1, Request for Information
- Form RD 3550-4, Employment and Asset Certification
- All application items listed in Attachment 12-E Checklist
Rural Development Staff and Application Packager Resources:
- The Rural Disaster Home Repair Grants Worksheet is a tool designed to identify what type of assistance a homeowner may receive; however, is not a final eligibility determination. The tool can be used to package 504 loans and grants.
- Repair packagers are not subject to the certified packaging process for purchase loans. Information regarding the 504 packaging process can be found in HB-1-3550, Chapter 3, Attachment 3-A.
- Repair packagers can sign a Memorandum of Understanding (MOU) with the State Office.
- Allowable packaging fees to any public, tribe or private nonprofit organizations may be included in repair loans and grants.
- Packagers are encouraged to visit the Direct Loan Application Packagers page for information and resources specific to packaging Section 502 Home Purchase Program.
- Eligibility for repair assistance considers household income and Total Debt (TD) ratio.