Section 504 Home Repair Program: If your current home has suffered a lot of damage, or it has been damaged by unfortunate situations like snow melting, heavy rains, or other natural disasters, then you have to repair your home to be safe and secure. Many homeowners have the funds to repair their damaged homes, but several low-income homeowners face financial challenges to repair their homes.
The United States Department of Agriculture (USDA) offers a home loan and grant program named Section 504 Home Repair Program to help vulnerable homeowners with necessary repairs. Low-income families and individuals who can’t afford any repair expenses can apply for these section 504 loan and grant programs to make necessary repairs and ensure a safe and better living.
Let’s take a closer look that what is the USDA section 504 home repair program, how can you apply for this program and other important information.
What Is The Section 504 Home Repair Program?
The Section 504 Home Repair Program, also popular as the Single-Family Housing Repair Grants and Loans provided by the USDA(United States Department of Agriculture). These home repair programs offer financial assistance to low-income families, disabled individuals, and senior citizens to repair their homes for better living. Through this program seniors and disabled individuals can remove safety hazards from their homes.
Through this program, you can repair roofs, foundations, or electric and water systems and can bring your home up to safety standards. People with disabilities can make their homes more accessible by adding ramps and bars, and also you can make your home more energy-efficient with insulation, energy conservation education, furnace repair and replacement, and heating duct improvements. Check out more home improvement grants for seniors here.
Who Manages Section 504 Program?
Section 504 is housed under the United States Department of Agriculture and, more specifically, falls under the domain of the USDA Department of Rural Development. And while you often hear it simply referred to as Section 504, the technical term for this program is the Single Family Home Repair Loans and Grants Program or single family housing section 504 repair program.
From the Rehabilitation Act to the ADA (Americans with Disabilities Act)
The Section 504 Home Repair Program is also known as single family housing repair loans and grants was created by the Rehabilitation Act of 1973 and amended by the Americans with Disabilities Act (ADA) of 1990.
Eligible disabled people can do roofing, painting, plumbing, and electrical repairs under this program. Homeowners who are eligible for this program can also get grants for their wheelchair ramps, bathroom modifications, and other needed home repairs.
If you qualify for the Section 504 home repair program, you can also apply for a home repair loan. The US Department of Housing and Urban Development (HUD) reported that this home repair loan is a short-term, low-interest mortgage loan. Eligible homeowners can use this fund to make repairs needed to make the home for sale better or safe.
Working with other community partners, HUD also provides grants for housing rehabilitation projects. These programs are available throughout the US, but the availability of funds depends on your state. You can only use the grant money to improve the health of your home.
Purpose of the Section 504 Home Repair Program
The purpose of the Section 504 home repair program offers grants and loans to low-income homeowners. You can use these grants and loan funds to repair and improve your homes. Disabled individuals can remove health and safety hazards from their homes, and remodel their homes to make them more accessible.
If you are eligible for the Section 504 loan funds then you can use this fund to modernize or improve your home, or can remove safety hazards. If you are also eligible for the section 504 home repair grant funds then you can use these funds only for removing health and safety hazards and necessary repairs and improvements. Mobile or manufactured homeowners can also use Section 504 home repair funds if:
- The applicant owns the land and the home
- The applicant occupies the home
- The home is on a permanent foundation
- Repairs are needed to remove safety hazards
What Are the Benefits of Section 504 Program?
- This program helps low-income disabled homeowners to make their homes more safe and accessible.
- The program is the best way to maintain the value of your home.
- You can live in your own home independently and safely.
- You will get financial assistance for your needed home repairs. You don’t have to pay anything for it and don’t have to hire any contractor.
Who is Eligible For Section 504 Home Repair Program
USDA Section 504 Home Repair Loan and Grant program is not for everyone. To be eligible for the program you have to meet all the eligibility requirements set by the USDA. To be eligible for the section 504 home repair program you have to meet certain eligibility requirements like:
- Applicants must be U.S citizens or legal non-residents of the United States.
- Applicants must be unable to receive any affordable loan from anywhere and must have very low-income (below 50% of the area median income).
- Only rural homeowners can be eligible for this program.
- You need the loan and grant money to repair and improve your current home or remove all safety hazards.
- Homeowners who are 62 years or more than that and unable to repay the Section 504 loan are eligible for the grant money.
- The budget analysis based on Form RD 1944-3, shows that the grant applicant has the financial ability to repay the loan, then the maximum amount must be issued as a loan.
Where Section 504 Loan And Grant Can Be Used?
Section 504 Home Repair Program fund can only be used for home repair and home improvements. For example, you can add or repair your door or windows, and other necessary repairs include:
- Add a new rooftop to make your home safe
- Add a new door or window
- Repair home water system
- Fix up electrical issues
- Building new room
- Improve mobility and accessibility for disabled individuals
- Make home more energy efficiency
- Repair needed structural damages
Restrictions on the Use of Section 504 Funds
Section 504 program also called rural housing repair loans and grants. The U.S Department of Agriculture (USDA) was very specific about the Section 504 home repair program florida. There are certain restrictions on the use of section 504 funds. They have a clear list that where you can use the fund and where you can’t.
Not everyone is eligible for the program and no anywhere you can use the fund. Below we mentioned some lists and if you need Section 504 funds only for this purpose then don’t apply for them, you will get rejected. So, if you are eligible for the Section 504 funding, never use that fund for any of the following:
- Pay for off-site improvements
- Build a new deck
- New construction
- To pay off any bills
- Refinance your debt or unpaid bills
- Buy or install home appliances
- Site preparation or landscaping
- To swift your mobile home in a new location
- Build new driveways
Terms of the Section 504 Home Repair Loans and Grants
So what are the terms of the section 504 home repair program? Let’s check out:
- You have to pay the loans in 20 years at 1% interest, but the loan term should be shortened if the applicant can’t repay the maximum loan amount.
- Through the Section 504 program, you can get a loan amount of up to $20,000 and a grant amount of up to $7,500.
- You have to utilize the 504 home repair grants amount to remove health and safety hazards.
- You can combine the section 504 loans and grants for up to $27,500.
- The section 504 loan and grant are combined if the applicant can repay part of the cost.
Maximum Section 504 Loan and Grant Amount
There are a number of measurements are there that decide how much money you can get through the Section 504 home repair program. But the maximum amount you can get from Section 504 loans can never be more than $20,000, and the lifetime maximum amount you can get from a USDA Section 504 grant is $7,500.
Remember that the applicant can only receive a grant or loan amount to cover eligible repair costs. If the applicant has only $3,000 of eligible repair, then the maximum loan or grant amount allowed is $3,000.
How To Apply For Section 504 Home Repair Loans And Grants
So the question is “how do i apply for section 504 home repair program”. The Section 504 home repair programs application types are quite easy. But before that, you have to visit the USDA website to verify your eligibility. Although the usda 504 application process was the same as other common loans, still if you have difficulties then you should consult with the USDA home loan professionals to get a proper idea.
You should prepare the below documents before applying for the Section 504 program.
- Your current asset
- Current Households income
- All credit or debts
- Homeownership proof
Before submitting any documents remember that don’t provide any unrelated or incorrect documents. Your all documents must be authentic and correct. The USDA will verify your application and determine your eligibility.
Homeowners who want to apply for the Section 504 home repair program then you should contact your local Rural Development office and fill out Section 504 Home Repair program application forms.
How to Know if Your Area Is Eligible for the Program
If your rural region’s population is less than 35,000, you qualify for the Section 504 home repair program. Simply check online here and look up your home address to see if you’re eligible.
What Are the Next Steps if You Want to Apply?
Section 504 funding would be something you qualify for and want to move the process forward, here is what you will need to do:
Check to see if your home qualifies
First, you want a better idea of whether you will qualify for the program before you get all your paperwork in order. To do so, click on this LINK HERE to see if your home is listed as an eligible home for the program.
Complete the necessary preliminary documents
Click on the below links and print out these applications. So fill them in first, then move on to the next step.
- Uniform Residential Loan Application (RD 410-4):
- Request for information (RD 3550-1):
- Certificate of Employment and Assets (RD 3550-4):
Contact your local agent
There are people for that in every state. To find a way to contact one near you, click this LINK and enter the appropriate information.
How Are You Reimbursed Under Section 504?
You have two repayment options under Section 504, but neither occurs until the work is complete. The first option you can take is to receive a lump sum after all construction is complete.
This is the preferred method that the USDA likes to use. The second option is to pay with several advances throughout the life of the project. These advances are capped at 60% of the total cost of the project.
Are Inspectors Required to Check My Work?
Yes, if you receive Section 504 financing, you will need to have a properly licensed inspector come to your property to approve the construction you have completed. The usda 504 grant program also notes that the number and type of inspections you need for construction projects you’ve done varies by locale and type of project.
Are Some People Given Priority Over Others?
The USDA uses a four-tier process to identify to who they give money first. This tier system is as follows:
- Those affected by natural disasters, without heating, with a failing septic tank, or with obvious health and safety issues
- Those who need to remove other health and safety concerns
- Subsequent requests by a current borrower
- All other requests
Frequently Asked Questions
Who is defined as Low-income and very low-income?
Individuals with households income between 50-80% of the area median income are defined as low-income, and below 50% of area median income is defined as very low-income.
What are the property Requirements for the Section 504 Home Repair Loans and Grants?
To be eligible for the section 504 home repair program your property must be considered modest for the area. Secondly, you don’t have an in-ground pool in your home, and lastly, your property value must not be more than the area loan limit.
How much time does it take to get approval for the Section 504 Home Repair Program?
After submitting the application Rural Development office will take 30 to 60 days to make a decision. Also, approval will depend on the fund’s availability.
Does my bad credit score affect my section 504 loan approval?
Having a bad credit score is not affect your loan eligibility. But you must maintain a good credit score to get any USDA loan easily. Although your rate may vary according to your credit score, so it’s always better to maintain a good credit score.
What is a USDA Section 504 loan?
USDA Section 504 offers loans to low-income homeowners to repair or improve their homes.
Is there any deadline for applying Section 504 home repair program?
There is no deadline for the Section 504 program, you can apply for a Section 504 grant and loan at any time of the year.
Do I have to repay the Section 504 grant amount?
No, you don’t have to repay the Section 504 grant amount. But applicants who receive grant funds have to sign Form 3550-24 Grant Agreement stating grant amounts are subject to repaid and recapture if the property is sold within 3 years.
Conclusion
We hope that this article was helpful for you and remove all your confusion about the Section 504 Home Repair Program. You can also easily apply for the program but remember that each free government home repair grants and loan have limited funds and resources, so apply for the program as soon as possible, otherwise, you have to try next year.
Remember that there is a certain limit to any government funds, but applicants have no limit. So always provide correct information to get approval. Your information and application will be verified by the professionals, we provide only correct and true information.
If you need help completing your application then you can contact any USDA consultants or can visit your local USDA office. Lastly, if you still have any queries then feel free to ask us in the comment section below. You can also contact the local USDA home loan specialist in your area for more information.