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

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

Local Offices

Western Region: Jim Walfrand, Area Director (585) 343-9167 x4

Batavia Service Center

29 Liberty Street, Suite 2
Batavia, NY 14020
Voice: (585) 343-9167, ext. 4
Fax: (855) 889-1627

 Counties served: Niagara, Orleans,Genesee, Wyoming, Erie

 Bath Service Center

415 W. Morris Street
Bath, NY 14810-1038
Voice: (607) 776-7398, ext. 4
Fax: (855) 889-1628

Counties served: Schuyler, Steuben, Allegany, Cattaraugus,Chemung, Chautauqua

Canandaigua Service Center

3037 County Road 10
Canandaigua, NY 14424
Voice: (585) 394-0525, ext. 4
Fax: (855) 558-7583

Counties served: Wayne, Seneca,Ontario, Yates, Livingston, Monroe

Cortland Service Center

1 North Main Street, 2nd Floor
Cortland, NY 13045
Voice: (607) 753-0851, ext. 4
Fax: (607) 753-3190

Counties served: Onondaga, Tompkins, Cortland, Chenango, Tioga, Broome, Cayuga

Northern Region: Brian Murray, Area Director (315) 386-2401 x4

Canton Service Center

1942 Old Dekalb Road
Canton, NY 13617
Voice: (315) 386-2401, ext. 4
Fax: (855) 889-1629

Counties served: Clinton, Franklin, St. Lawrence

Watertown Service Center

21168 NYS Route 232
PO Box 838
Watertown, NY 13601
Voice: (315) 782-7289, ext. 4
Fax: (855) 889-1635

Counties served: Jefferson,Lewis, Oswego

Marcy Service Center

9025 River Road
Marcy, NY 13403
Voice: (315) 736-3316, ext. 4
Fax: (855) 558-7596

 Counties served: Herkimer,Oneida, Madison

 Eastern Region: Ronda Falkena, Area Director (845) 343-1872 x4

 Greenwich Service Center

2530 State Route 40
Greenwich, NY 12834
Voice: (518) 692-9940, ext. 4
Fax: (855) 889-1631

 Counties served: Warren,Washington, Hamilton, Essex, Rensselaer, Saratoga

Schoharie Service Center

108 Holiday Way
Schoharie, NY 12157
Voice: (518) 295-8600, ext. 4
Fax: (855) 889-1634

Counties served: Fulton, Greene, Montgomery, Schenectady, Albany, Schoharie, Otsego, Delaware

Middletown Service Center

225 Dolson Ave, Ste 104, 1st Floor
Middletown, NY 10940
Voice: (845) 343-1872, ext. 4
Fax: (855) 889-1632

Counties served: Sullivan, Ulster, Orange, Dutchess, Putnam, Suffolk, Westchester, Rockland, Columbia