Housing Repair Grants Available to Homeowners for Free
The Section 504 Home Repair program is a government-funded initiative that offers loans and free grants to very low-income homeowners to improve the safety, health, and overall condition of their homes. This program aims to help homeowners who cannot access affordable credit elsewhere and have household incomes below the very lowest limit for each county.
The COVID-19 pandemic has affected many homeowners, and in response, the American Rescue Plan Act (ARP Act) of 2021 has provided additional funds for Section 502 and Section 504 loans. This funding will remain available until September 30, 2023. Existing Section 502 and Section 504 borrowers have been issued a payment moratorium in relation to COVID-19, and the agency will now focus on refinancing their loans.
To be eligible for the free grants for homeowners, applicants must own and live in their homes and be at least 62 years old. They can use the funding to improve, upgrade, modernize, or eliminate safety and health hazards in their homes. The maximum loan amount is $40,000, while the maximum grant is $10,000. Applicants can also combine loans and grants to receive up to $50,000 in assistance.
The loan interest rate is fixed at 1%, and loans are termed for 20 years. If the total outstanding balance on Section 504 loans is greater than $25,000, full title service is required. Grants have a lifetime limit of $10,000, and if the property is sold within three years, the grants must be repaid. If applicants can repay part but not all of the costs, they may receive a loan and grant combination offer.
The approval time for applications depends on the availability of funding in the area. USDA loan specialists are available to provide assistance with the application process, and interested applicants can get in touch with a specialist in their local area.
The Housing Act of 1949, as amended 7 CFR Part 3550, and the HB-3550 Single-Family Housing Loans and Grants Field Office Handbook govern this program. USDA Rural Development administers this program to help families and communities benefit from staying in their homes and maintaining them in good condition. By becoming homeowners, individuals and families can save money, strengthen communities, and support many types of local businesses.