These Department of Agriculture (USDA) Rural Development housing programs exist in order to improve the quality of life for Americans living in rural areas by making sure they have access to safe, well-built and affordable homes.
As the program titles suggest, rural home repair grants and loans specifically help rural home owners with very low incomes and that live in homes needing repairs. The money received through these programs can be used for repairs, improvements, modernizations, or to remove health and safety hazards.
To be eligible to obtain a home repair grant or loan you must 1) live in a rural area, 2) be unable to get affordable credit elsewhere and 3) you must have a very low income. In this case, a very low income is defined as no more than 50 percent of the median income for the rural area you live in.
If you are 62 years old or older you can receive a grant of up to $7,500.00 and a loan of up to $20,000.00. In order to receive a grant you must be unable to repay a Section 504 Loan. If you are under 62 years old you cannot receive a grant, but you can receive a home repair loan of up to $20,000. Loans are for up to 20 years at 1 percent interest. A real estate mortgage and full title services are required for loans of $7,500 or more. If you receive a grant, the funds may be recaptured if the property is sold in less than 3 years. Grant funds can only be used to pay for repairs and improvements that result in the removal of health and safety hazards. A grant/loan combination is made if the applicant can repay part of the cost. Loans and grants can be combined for up to $27,500 in assistance.
Repaired properties do not need to meet other HCFP code requirements, but the installation of water and waste systems and related fixtures must meet local health department requirements. Water supply and sewage disposal systems should normally meet HCFP requirements. Not all the health and safety hazards in a home must be removed with Section 504 funds, provided that major health and safety hazards are removed. All work must meet local codes and standards.
Rural Development should make a decision on a complete application within 30 to 60 days of applying.
Basic Instruction: 7 CFR Part 3550 and HB1-3550
http://www.rurdev.usda.gov/rhs/sfh/brief_repairloan.htm
Here is the Rural Development contact info for all 50 states:
http://www.rurdev.usda.gov/recd_map.html
