This USDA Rural Development program provides loans and grants to low-income, rural homeowners, which can be used to make home modifications for elderly or disabled residents to improve safety and remove health hazards. This includes projects such as remodeling a bathroom to allow wheelchair access and / or walk in bathtubs, construction of wheelchair ramps, and widening of doorways or hallways to permit easier access. Both grants and loans are available. However, grants are only given to those who are elderly and considered unable to repay a loan. In the event an applicant is able to repay part of a loan, he or she may be awarded a partial loan and partial grant.
Be aware that, if conducting further research on this program, it is also referred to as the Section 504 Home Repair program, the Very Low-Income Housing Repair program and the RD 504 Loan program.
All applicants must be U.S. citizens or legal permanent U.S. residents. To take part in the USDA Rural Development Loan and Grant program, homeowners must be at least 18 years of age to be eligible for the loan and 62 years of age to be eligible for the grant. For both the loan and the grant, applicants must live in rural areas of the country. Typically, a rural area is defined as having a population of less than 10,000 persons. For a state by state and county by county list of eligible areas, visit this page.
This program also has income limits. Individuals must have income at such a level that they are unable to get loans from other organizations. Typically, this is defined as an annual income of less than 50% of the median income for the area. For state by state and county by county income limits, visit this webpage.
There is also a limit on non-retirement assets, meaning assets that can be liquid (cash) within 90 days. This limit is $15,000 for households in which an elderly person does not live, and $20,000 for those households in which an elderly person does live. If the limit is exceeded, the amount over the limit must first be used.
The maximum USDA Rural Development Grant amount is $7,500, and is a lifetime maximum. There is a requirement that states the grant must only be used for repairs and improvements for the health and safety of the occupants. In addition, if the home is sold within three years of receiving the grant, then the USDA can collect repayment from the grantee’s home sale proceeds.
The maximum loan amount is $20,000, with a repayment period of up to 20 years. For loans, the interest rate is fixed and very minimal at a 1% rate. Loans and grants to a single applicant can be combined, allowing for the maximum assistance of $27,500.