Home Repair Loans and Grants for Low-Income Americans

by on January 22, 2014Shannon O'Brien

Houses are a lot like cars in that if you don’t keep up on repairs, pretty soon they start to coalesce into one big, expensive pain in the neck. When the needed repairs are of a health or safety nature, the need for speed in fixing them can be overwhelming. While leaky roofs, bad wiring and rotted pipes can’t be ignored, fixing them is impossible for those without the financial means to do so.

The USDA offers loans and grants for home repairs to low-income homeowners in rural areasThe U.S. Department of Agriculture has programs to help low- to moderate-income homeowners in these situations: Rural Repair and Rehabilitation Loans and Grants. The programs are dedicated to assisting these homeowners with repairing, improving and updating their homes as well as removing health and safety hazards.

The Home’s Eligibility

Say the word “rural” to most people and they picture any area located outside of a city. The USDA has a unique definition of rural, however, when it comes to a home’s eligibility for a rural development loan or grant. This definition includes open spaces that are “not part of or associated with an urban area,” according to the USDA. But, the definition does not preclude small towns or villages. If these areas have a population fewer than 10,000, they may qualify. Areas with a population to 20,000 may qualify if there is a history of a serious lack of mortgage lending to low-income families in the area.

The Applicant’s Eligibility

The USDA uses the Department of Housing and Urban Development’s (HUD) formulation of an area’s median income (AMI) to determine income limits for its programs. Each region’s AMI is adjusted annually. To qualify for either a grant or a loan, applicants must have income below 50 percent of the area median income and be U.S. citizens or permanent residents. Grants are restricted to those aged 62 or older who lack the ability to pay back a rural development repair and rehabilitation loan. Applicants to either program must occupy the home.

Grant Terms

The funds that the applicant receives from the rural development grant program can only be used to pay for work performed to remedy health and safety hazards and improve accessibility. Some of the most common repair jobs include improvements to the home’s insulation, roof repair, new heating or cooling systems, adding ramps, widening doorways and repairing water and sewer connections. The maximum grant amount is $7,500.

Recipients aren’t required to pay back the grant money unless the home is sold within three years of receipt of the grant. In that case, the recipient is required to reimburse the USDA from the proceeds of the sale.

Loan Terms

Loans are available up to $20,000 at 1 percent interest for 20 years. They may be used to improve, update and repair the home as well as to remove safety and health hazards.

Repair Guidelines

The rural development program has certain guidelines for the repairs done with the grant money. If the repairs include anything having to do with waste and water systems, they must meet the area’s health department standards. While USDA loans used to purchase a home mandate that the house must meet the state’s building code and the Housing and Community Facilities Program (HCFP) thermal and site standards, repaired properties – either with the use of a grant or a loan – aren’t held to these guidelines.

To learn more about either program, contact a USDA Service Center in your area.

{ 12 comments… read them below or add one }

future home owner September 18, 2014 at 6:52 pm

I was approved for a usda loan and I found a house that is less then my loan amount. Is it possible to use the rest of that money for small repairs.

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Tami snodgrass August 28, 2014 at 7:06 am

I’m in need of my bathroom roof fixed.. When it rains it rains in my bathroom ..My husband is disabled and can not fix it.. It has been this way for 2yrs.. Its getting worse and didn’t know how to get help.. My husband gets disability but it doesn’t go far .. Thank u for your time!!!

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Keisha Seals August 13, 2014 at 6:16 am

We need help with repairs around the house get in touch with me so i know wat to do..

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Debra August 1, 2014 at 8:30 pm

Hello I would like to know how I can go about getting some help for my in-laws. They are in their 80′s and they need help fixing up the floors and roof. They do not work and live on a minimal budget. The floors are really not safe for someone in their 80′s.The roof has leaks all over the house. I’m afraid it will one day come down. I need a grant as soon as possible,so I can get them some help before it get more dangerous for them to live their. Yes we can bring them in but to them it’s nothing like living in their own home. Please advise me as to where I can go to get a grant

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amy walker July 9, 2014 at 9:40 pm

Hello, my name is Amy Walker. I live in my home with my 78 year old mother and my 15 yr old son. our roof is leaking and desperately needs repaired. Any suggestion or help is needed because we are a low income family. thankyou.

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joanne cocchiaro July 7, 2014 at 8:18 am

I need help ,I am low income. I need new roof and windows In my home.I am on ssdi income please find me some help. Joanne

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Marsha Carlson July 4, 2014 at 1:37 pm

My daughter and son in law just bought a house it needs slot of work to be livable. I just wanted to know if they can get some help. They have a low income. Thank you.

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Danielle Perez June 24, 2014 at 12:16 pm

Hello my name is Danielle and my family is in need of some major repairs in my home. I am the only one working right now and I have 3 children. Our heat and air conditioning system is shot and we were told that we need a new one since the system is very old. The winter was also harsh on our front steps and they are crumbling. Any help or advice would be appreciated. Thank you in advance.

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Michelle Belton June 17, 2014 at 7:59 pm

Hello my name is Michelle I am in need of repairs around my house and cannot afford to get the things fix if you can help please help and I will be for ever so grateful thank you!!!

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Diana Dushensky June 7, 2014 at 3:33 pm

Hello my name is Diana. We are in need for help doing repairs around our home. As we can’t afford to do so. Please let me know if you can help us. Greatly appreciated . Diana .

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sam January 23, 2014 at 12:38 am

Shannon O’Brien many thanks for this really nice information. House demands care like every thing in the world. For less earning people its good option.

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Shannon O'Brien February 4, 2014 at 1:06 am

You are so welcome. It is difficult for those of us that don’t make the huge bucks to get the help we need. Hope this helps a lot of people and I’m grateful that RealEstate.com helps me get the word out.

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