USDA Rural Development Grant & Home Repair Loan

USDA Rural Development has two programs that many people are not aware of.  One is the USDA Grant for home repairs and the other is a USDA Home Repair loan at 1% interest.  I'll cover the basic qualifying factors in this blog.

First understand that all USDA loans are focused toward rural development so the property must be located in a rural eligible area.  This is mandatory and there is no way around it.

The Grant program is in the amount of $7500 Maximum.  The amount of the grant you will receive is equal to the cost of the repairs on your home.  You can't just apply for the loan and do what ever you want with the funds.  The funds and repairs are suppervised by USDA staff.

You must also be 62 years old or older to qualify for the grant.  Your income must be in the very low percentile.  Very low income is defined as 50% or less of the median income for that specific county.  This is hard over, no waviers.

Your budget and repayment ability are looked at along with your credit history.  If your budget clearly shows that you have very little income left after paying your bills and expenses you will probably meet that requirement.  Your credit does not have to be flawless but should not show blatant disreguard.

The USDA Home Repair loan is different in many areas.  This loan is usually refered to as a 504 repair loan.

There is no age requirement but to qualify your income must still be "Very Low".  Your repayment ability must be evident.  By that I mean that after paying your bills and living expenses you must have enough residual income to pay back the loan.

The loan as I mentioned is fixed at 1% interest with a maximum term of 20 years.  Your credit history must show that you do pay your debts.  Medical collections are sometimes overlooked if you do not have repayment ability.

Both the loan and the grant usually work well for people on fixed income.  These are great programs and help a lot of people.  To apply for one you must contact your closest USDA Rural Development office.

If you are interested in the USDA Guaranteed program you can research the qualifications at USDA Rural Development Mortgage Guidelines