USDA farm labor housing and mutual self-help homes

The land feeds the country, but the people who work it often cannot find a home at a fair price. This guide is for families who work in agriculture and for low-income families in rural areas. It explains two programs of USDA, the Department of Agriculture: farm labor housing, under Sections 514 and 516, and mutual self-help housing, under Section 523, in which several families build their homes together.

Of your region's income limit, the least you must earn from farm work to qualify (50% for a migrant in seasonal housing)

65%⁷

Of farm work in the last 12 months, another way to show you qualify

110 days⁷

Families per group in mutual self-help

4 to 10¹¹

Of the construction tasks, the share families do with their own labor

65%¹¹

Two different programs

Farm labor housing (Sections 514 and 516). It is rental housing, on or off a farm, for farm workers.¹ It aims to increase affordable, decent, safe and sanitary housing for people who work the land, and can include furnished seasonal housing.⁴ Off-farm housing is built by nonprofits, including farmworker organizations, tribes, community organizations and state or local governments; grants go to them.⁵ On-farm housing is built by farmers or farmer associations for the workers in their own operation, with loans only.⁹

Mutual self-help (Section 523). It is for very-low- and low-income families who want to become owners. USDA gives grants to organizations to guide and supervise groups of families who build their own homes.¹⁰

Farm labor housing or mutual self-help

Rentals

Farm labor housing (514 and 516)

• For households with an active, retired or disabled farm laborer.⁷
• Rent is based on your income; rental assistance may be available.³
• No one can require you to work for a particular employer.⁷

Your own home

Mutual self-help (523)

• Groups of 4 to 10 families build their homes together.¹¹
• Each family needs an approved Section 502 loan before starting.¹¹
• An organization guides and supervises the work.¹¹

Both programs are USDA programs for rural areas.¹⁷

Who qualifies for farm labor housing

What counts as farm work. The regulation defines it broadly: cultivating the soil; raising or harvesting agricultural or aquacultural commodities; catching, handling, planting, drying, packing, grading, storing or preserving them unprocessed; or delivering them to storage, market or a carrier. It does not matter who employs you, but self-employment does not count.¹

Who is a “domestic farm laborer.” The regulation says it is a person who receives a substantial part of their income from farm work, not self-employed, in the United States, Puerto Rico or the Virgin Islands, and who is a U.S. citizen, or lives here after being legally admitted for permanent residence, or is a person legally admitted to the United States and authorized to work in agriculture. The definition can include immediate family members living with them.¹

Retired and disabled workers count too. A retired farm laborer is at least 55 and worked in the fields the last 5 years before retiring, or most of the last 10. And a disabled one was working in the fields when they became disabled.¹

Household and income. To live in off-farm housing, the household must include a domestic farm laborer tenant or co-tenant, a retired one or a disabled one, and must be income eligible. On top of that, the tenant or co-tenant must earn a substantial part of their income from farm work:⁷

• Farm earnings must be at least 65% of the agency’s published annual income limit for the region.
• For a migrant worker in seasonal housing, 50% is enough.
• If earnings data are not available, having worked at least 110 whole days in farm work in the previous 12 months counts, with days of at least 7 hours.
• After a natural disaster such as a drought, flood or freeze, the 12 months before the disaster are used.

Example with real numbers

A harvest worker who moves each season

An example in words of how eligibility is checked.

Their work

Harvesting and packing fruit, for several employers

Where they live

Seasonal off-farm housing

What they must earn from farm work

At least 50% of the region's income limit, as a migrant in seasonal housing

If they have no pay stubs

Having worked at least 110 whole days in farm work last year can count

If a freeze ruined the harvest

The 12 months before the disaster are used

What cannot be required of them

Working for a particular employer to live there

The example's rules come from USDA's regulation.⁷⁷ Use the calculator to see how much rent you can afford on your income.

Run it with your numbersHow much rent can I afford?

Your rights and what you pay

No work condition. In off-farm housing, no owner can require you to work on a particular farm or for a particular employer as a condition of living there. And no one can discriminate against you because of race, color, religion, sex, age, disability, familial status or national origin.⁷

Your rent. What you pay is based on your income and whether you get rental assistance. It is the highest of 30% of your monthly adjusted income, 10% of your gross monthly income, the housing part of a public assistance payment if you get one, or the basic rent if you do not get the agency’s rental assistance. You never pay more than the note rent.³

Rental assistance and seasons. Income-eligible tenants can get rental assistance. Seasonal housing must have set opening and closing dates, and off-season it can be rented on short-term leases.⁶ When the need for farmworker housing drops, units can be rented to other families who qualify for rural housing, until they are needed again.⁷

The order. Active farm laborer households come first, very low income first, then low and then moderate. Next come retired or disabled workers who worked in the local farm labor market, and then those who worked elsewhere.⁸

How to apply for farm labor housing

You apply at the property, with the owner or manager. The form asks, among other things, for your name and address, how many people live with you and their birth dates, your income, whether you need an accessible unit, a certification that the unit will be your primary residence and that you are a citizen or a qualified alien, and your Social Security numberSocial Security number (SSN)A Social Security number (SSN) is the nine-digit number on a Social Security card. It is issued by the Social Security Administration (SSA), a federal agency, and you need it to work and to collect government benefits. The IRS also uses it as your taxpayer identification number on tax returns. You apply with Form SS-5 and proof of identity, age and U.S. citizenship or lawful immigration status, and the service is free. People who must file taxes but cannot get an SSN use an ITIN. Identity thieves look for this number; the government advises keeping the card in a safe place and not carrying it in your wallet.See the full definitionClose.² The regulation defines a “legal or qualified alien” as any person lawfully admitted to the country who meets the criteria in section 214 of the federal housing law.¹

From application to keys

1. 1. Ask at the property

   Today

   Ask the owner or manager of the farm labor housing for the application.²

2. 2. Fill out the application

   When you apply

   With your information, your household's, your income and the certifications.²

3. 3. Get on the waiting list

   When you hand in the application

   The date and time of a complete application set your place on the list.²

4. 4. Complete anything missing

   If they tell you

   If something is missing, they must tell you in writing within 10 days.²

5. 5. Get the answer in writing

   Within 10 days of a complete application

   They tell you whether you were selected, placed on the list or rejected.²

If you already have a leaseleaseA lease, or rental agreement, is the contract in which the owner or landlord gives you the right to live in and use a property for a set period of time in exchange for payment, usually rent. While the lease lasts you have possession, but the landlord still owns the property. The lease says how much you pay and when, who handles maintenance and how the agreement can end. Your rights as a tenant are usually spelled out in the lease and in your state and local laws. Before complaining to the landlord, it helps to read the lease and make sure you are also following the rules you agreed to.See the full definitionClose, our guide to your lease explains what to check. And if you do not have a Social Security number for other rentals, our guide on renting without a Social Security number or credit explains your options.

Mutual self-help: building your home with other families

In mutual self-help, families organize in groups of generally 4 to 10 and use their own labor to lower the cost of their homes. They finish the work by exchanging labor: today everyone works on your house, tomorrow on your neighbor’s. For new construction, this is the method used.¹¹

The program looks for families who otherwise would not qualify as owners: generally families below 50% of median income, living in substandard housing or lacking the skills to be owners. Very-low-income families get priority.¹⁰

Who can take part. Very-low- or low-income families who can do their share of the work, regardless of the head of household’s disability, age, race, national origin, religion, family status or sex. Before the work starts they must be approved for a Section 502 rural housing loan or a similar loan, have enough time to build and want to work with other families. Each family works on the others’ homes until 65% of the tasks are done. Only if a family becomes incapacitated, and with prior approval, can someone else do their share.¹¹

What the organization does. The organization that receives the grant recruits families and helps them get loans; holds meetings to explain the program and homeownership topics such as payments, taxes, insurance and upkeep; helps find land, choose plans the families can afford and get cost estimates; prepares loan applications; and supervises and trains families during the work.¹¹ It can be a state or local government, a public nonprofit corporation, a tribe or a private nonprofit corporation.¹¹ The organization helps with the application, but only USDA Rural Development can approve or deny it.¹²

The Section 502 loan each family needs

For self-help, each family needs a direct USDA loanUSDA loanA USDA loan is a mortgage from the Rural Housing Service, part of the U.S. Department of Agriculture (USDA). It is meant for low- and moderate-income families buying a home in an area the USDA considers rural, and it can be offered with no down payment. There are two paths: the USDA guarantees a loan made by a private lender, or it lends directly to very-low-income families. To qualify, your income must be within the limit for your area and the home must be in an eligible area, which you can check on the USDA's map.See the full definitionClose under Section 502 or a similar loan.¹¹ This is what the Section 502 regulation requires:¹⁴

• Income. At approval, the household’s adjusted income cannot exceed the area’s low-income limit, and at closing, the moderate-income limit.
• Citizenship or status. Be a U.S. citizen or a noncitizen who qualifies as a legal alien.
• Live in the home. It must be your principal residence.
• Not already own a home, with exceptions.
• Be able to pay. Principal, interest, taxes and insurance should not exceed 33% of your repayment income, and with your other monthly debts, 41%. See our guide on debt-to-income ratio to do the math.
• The homebuyer course. If you are a first-time buyer, you must complete a course from a certified provider, with exceptions. Our guide on homebuyer education courses explains how to find one.

Rate and term. The loan uses USDA’s rate in effect at approval or closing, whichever is lower, and current rates are available at any Rural Development office. The term is no more than 33 years, or 38 if your adjusted income does not exceed 60% of area median income and you need it to afford the payment. There are payment subsidies, such as interest credit, that are recaptured if you transfer title or stop living in the home.¹⁵

To check whether an area is rural for USDA and whether your household might qualify, and to contact a program representative, use USDA’s eligibility site.¹⁷ Our USDA loan guide explains the guaranteed loan, which is a different program.

If this is you

You work the harvest and move each season

As a migrant in seasonal housing, earning 50% of your region's income limit from farm work is enough.⁷

You retired after years in the fields

If you are at least 55 and worked in the fields the last 5 years, you count as a retired farm laborer.¹

Your family wants to build its own home

In mutual self-help, you build with a group of 4 to 10 families and an organization that guides them.¹¹

You are buying for the first time

The Section 502 loan requires a homebuyer course from a certified provider.¹⁴

You are in the U.S. with permission to do farm work

The domestic farm laborer definition includes someone legally admitted and authorized to work in agriculture,¹ and the application asks you to certify that you are a citizen or a qualified alien;² ask an accredited representative about your case.

Costly mistakes

• Mistake: Agreeing to live in off-farm housing in exchange for working for the owner.

  Instead: No one can require you to work for a particular employer to live there.⁷

• Mistake: Not applying because you have no pay stubs.

  Instead: Having worked at least 110 whole days in farm work last year also counts.⁷

• Mistake: Handing in an incomplete application and not coming back.

  Instead: Your place on the list is set by the date of the complete application; finish what is missing.²

• Mistake: Starting to build before the loan is approved.

  Instead: In self-help, each family must be approved for the Section 502 loan before starting.¹¹

• Mistake: Thinking the self-help organization approves your loan.

  Instead: The organization helps with the application, but only Rural Development approves or denies it.¹²

• Mistake: Selling or leaving the home without thinking about the payment subsidy.

  Instead: Section 502 payment subsidies are recaptured if you transfer title or stop living there.¹⁵

What to do this week

1. Gather proof of your farm work: pay stubs, letters from your employer or a record of the days you worked.⁷
2. Ask at the farm labor housing in your area for the application and get on the list.²
3. If you want to build with other families, look for the self-help organization in your area and ask when the next group starts.¹¹
4. Check on USDA’s eligibility site whether your area is rural and whether your household might qualify.¹⁷
5. If you have a problem with your housing or your application, look for free legal aid; LSC has a search tool.¹⁸