Loans and Grants for Single Family Home Repair

USDA Offers Loans and Grants to Repair Rural Homes. Lori Greig/Getty Images

The U.S. Department of Agriculture (USDA) offers low-interest loans and grants to very-low-income homeowners in eligible rural areas for certain improvements to their homes. Specifically, the USDA’s Single Family Housing Repair Loans and Grants Program offers:

  • Loans to qualified very-low-income homeowners to repair, improve, or modernize their homes. Loans may be used to repair, improve, or modernize the home, or to remove health and safety hazards from the home.
  • Grants to qualified elderly very-low-income homeowners. Grants must be used to remove health and safety hazards from the home.

Who Can Apply?

In order to qualify for loans or grants, applicants must:

  • Be the homeowner and actually live in the home;
  • Be a citizen of the United States or reside in the United States after having been granted legal permanent resident (green card) status;
  • Be financially unable to obtain affordable credit elsewhere;
  • Have a combined family income below 50% of the area median income; and
  • For grants, be age 62 or older and be financially unable to repay a conventional home repair loan.

What is an Eligible Area?

USDA Single Family Housing Repair Loans and Grants Program loans and grants are generally available to homeowners in rural areas with community populations of less than 35,000. The USDA provides a web page where prospective applicants can check their address to determine their eligibility online.

Within the population limit, loans and grants are available in all 50 states, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Northern Mariana's and the Trust Territories of the Pacific Islands.

How Much Money is Available?

Loans of up to $20,000 and grants of up to $7,500 are available. However, a person age 62 or older may be eligible for combined loans and grants totaling up to $27,500.

What are the Terms of the Loans or Grants?

Compared to conventional home repair loans, with interest rates averaging over 4.5%, the terms of the USDA loans are very attractive.

  • Loan interest rates are fixed at 1%.
  • Loans can be repaid over a period of 20 years.
  • Full title service is required for loans of $7,500 or more. (Title service fees are costs associated with issuing a title insurance policy for the lender.)
  • Grants have a lifetime limit of $7,500.
  • Grants do not have to be repaid unless the house is sold in less than 3 years.
  • If the applicant can repay part, but not all of the costs, the applicant may be offered a combination of a loan and a grant.

Are There Deadlines to Apply?

As long as Congress continues to fund the program in the annual federal budget, applications for the loans and grants can be submitted year around.

How Long Does the Application Take?

Applications for loans and grants are processed in the order they are received. Processing times may vary depending on the availability of funds in the applicant’s area.

How Do You Apply?

To begin the process, applicants should meet with a USDA home loan specialist in their area for help with the application.

What Laws Govern this Program?

The Single Family Housing Repair Loans and Grants Program is authorized and regulated under the Housing Act of 1949 as amended (7 CFR, Part 3550) and House Bill HB-1-3550 - Direct Single Family Housing Loans and Grants Field Office Handbook.

Note: Since the above laws are subject to amendment, applicants should contact USDA home loan specialist in their area for current program details. 

Other Government Sources of Loans and Incentives

Besides the USDA’s home repair loans and grants programs, financial help for home repairs or modifications is available from other government sources. Some programs are available nationwide, while others are only available at the state or county level.

Help for Certain Demographic Groups