Program 101

Fact Sheet

Program Status: Open

What does this program do? 
Also known as the Section 504 Home Repair program, this 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.

Who may apply for this program?
To qualify, you must:

  • Be the homeowner and occupy the house
  • Be unable to obtain affordable credit elsewhere
  • Have a family income below 50 percent of the area median income 
  • For grants, be age 62 or older and not be able to repay a repair loan

What is an eligible area?
Applicants may check the address of their home to determine eligibility.

How may funds be used?

  • Loans may be used to repair, improve or modernize homes or remove health and safety hazards
  • Grants must be used to remove health and safety hazards

How much money can I get?

  • Maximum loan is $20,000
  • Maximum grant is $7,500
  • Loans and grants can be combined for up to $27,500 in assistance

What are the terms of the loan or grant?

  • Loans can be repaid over 20 years
  • Loan interest rate is fixed at 1%
  • Full title service is required for loans of $7,500 or more
  • Grants have a lifetime limit of $7,500
  • Grants must be repaid if the property is sold in less than 3 years
  • If applicants can repay part, but not all of the costs, applicants may be offered a loan and grant combination

Is there a deadline to apply? 

  • Home loans are available year round as long as funding is available
  • Home loan applications are processed in the order they are received

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.

Forms & Resources

One-Stop Guide to Rural Development Home Loan Financing

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.

Applicant Resources:

Applicants interested in applying for a repair loan or grant can contact their local Rural Development office and provide the following documentation:

Borrower Resources:

Rural Development Staff and Loan Application Packager Resources:

  • Recent Changes to the Section 504 Program
  • Repair loan 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.
  • Allowable packaging fees to any public, tribe or private nonprofit organizations may be included in repair loans, but not repair grants.
  • The 504 Automated 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.
  • For grant eligibility you must meet the age requirement of 62 or older (additional requirements apply).  Income based grant eligibility is determined by the household's adjusted annual income compared to the area median income (AMI). 
  • Repair assistance is determined by the households adjusted annual income and existing mortgage payments, real estate taxes, homeowner's insurance and other monthly total debts (TD). Very-low income homeowners could qualify for loans and/or grants in one of three ways:
    1. Adjusted annual income up to 30% of AMI or Total Debts (TD) exceeding 46% may qualify for up to a $7,500 grant for eligible purposes.
    2. Adjusted annual income exceeding 30% of AMI with Total Debts (TD) between 30%-46% may qualify for both a repair loan and grant.
    3. Adjusted annual income exceeding 30% of AMI with Total Debts (TD) less than 30% may qualify for up to a $20,000, twenty-year, 1% interest rate loan.

Training Resources:

Webinar on the Repair Loan & Grant Changes effective Oct 5, 2017
   • Handout for the Webinar

 

Architect

Individual states may have particular requirements based on state and local regulations. Please contact the state office in the state where your project is located.

Contacts

Nebraska State Office
Federal Building, Suite 308
100 Centennial Mall North
Lincoln, Nebraska 68508-3859
402.437.5551 Phone
402.437.5093 TTY
855.207.0384 FAX

Mike Buethe, Single Family Housing Director
402.437.5574

Krista Mettscher, Single Family Housing Specialist
402.437.5518

Teresa Brohimer, Single Family Housing Specialist
402.437.5505

For general program questions, email us.
Lincoln Office
100 Centennial Mall North, Suite 308
Lincoln, NE 68508
402.437.5551 Phone
855.207.0384 FAX

Rebecca Adams, Single Family Housing Specialist
402.437.5748

Jill Divelbess, Single Family Housing Specialist
402.437.5736

Kearney Office
4009 6th Avenue
Kearney, Nebraska 68845-2386
308.455.9847 Phone
855.207.0384 FAX

Michael Vukas, Single Family Housing Specialist
308.455.9838

Norfolk Office
2601 Lakeridge Drive, Suite 2
Norfolk, Nebraska 68701
402.371.5350 Phone
855.207.0384 FAX

Janell Wyant, Single Family Housing Specialist
Extension 117

Scottsbluff Office
818 Ferdinand Plaza, Suite B
Scottsbluff, Nebraska 69361-4401
308.632.2195 Phone
855.207.0384 FAX

Tammy Strey, Single Family Housing Specialist
Extension 135

Debra Suhr, Single Family Housing Specialist
Extension 136