What we verified in “USDA 504: home repair loans and grants for rural homeowners”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. Under USDA's regulation (7 CFR §3550.101), loans and grants under section 504 of the Housing Act of 1949 are intended to help very-low-income owner-occupants in rural areas repair their properties.

   Sources 3 · 7 CFR §3550.101: 'This subpart sets forth policies for administering loans and grants under section 504(a) of title V of the Housing Act of 1949'; 'Section 504 loans and grants are intended to help very low-income owner-occupants in rural areas repair their properties' · Checked October 31, 2026

2. Under the regulation (7 CFR §3550.102(a)–(b)), grant funds may be used only for repairs and improvements that remove identified health and safety hazards, or to repair or remodel the home to make it accessible and usable for household members with disabilities, and unused grant funds must be returned; loan funds may pay for general repairs and improvements or to remove health and safety hazards, as long as the home remains modest in size and design.

   Sources 4 · 7 CFR §3550.102(a)–(b): 'Grant funds may be used only to pay costs for repairs and improvements that will remove identified health and safety hazards or to repair or remodel dwellings to make them accessible and useable for household members with disabilities'; 'Unused grant funds must be returned'; 'Loan funds may be used to make general repairs and improvements to properties or to remove health and safety hazards, as long as the dwelling remains modest in size and design' · Checked October 31, 2026

3. Under the regulation (7 CFR §3550.102(d)), besides the repairs, loan and grant funds may pay reasonable costs of obtaining them, such as legal, architectural and engineering, title and closing fees, appraisal and other technical services; special design features or equipment needed because of a household member's physical disability; reasonable utility connection fees for water, sewer, electricity and gas; property taxes due at closing and setting up escrow for taxes and insurance; and fees to tax-exempt nonprofit organizations that package applications.

   Sources 4 · 7 CFR §3550.102(d)(1)–(5): 'Reasonable expenses related to obtaining the loan or grant, including legal, architectural and engineering, title clearance, and loan closing fees'; 'The cost of providing special design features or equipment when necessary because of a physical disability'; 'Reasonable connection fees, assessments, or the pro rata installation costs for utilities such as water, sewer, electricity, and gas'; 'Real estate taxes that are due and payable on the property at the time of closing and for the establishment of escrow accounts'; 'Fees to public and private nonprofit organizations that are tax exempt' · Checked October 31, 2026

4. Under the regulation (7 CFR §3550.102(e)), section 504 funds may not be used to build a new dwelling; repair a home in such poor condition that it would still have major hazards afterward; move a mobile or manufactured home from one site to another; pay for off-site improvements other than utility connections; refinance debts incurred before the application, with exceptions; or pay fees, commissions or charges to for-profit entities for packaging the application or referring applicants.

   Sources 4 · 7 CFR §3550.102(e)(1)–(6): 'Assist in the construction of a new dwelling'; 'Make repairs to a dwelling in such poor condition that when the repairs are completed, the dwelling will continue to have major hazards'; 'Move a mobile home or manufactured home from one site to another'; 'Pay for off-site improvements except for the necessary installation and assessment costs for utilities'; 'Refinance any debt or obligation of the applicant incurred before the date of application'; 'Pay fees, commission, or charges to for-profit entities related to loan packaging or referral of prospective applicants to RHS' · Checked October 31, 2026

5. Under the regulation (7 CFR §3550.102(c)), repairs to remove health and safety hazards may be made to mobile or manufactured homes if the applicant owns the home and the site, lived in the home before applying, and the home is on a permanent foundation or will be put on one with section 504 funds.

   Sources 4 · 7 CFR §3550.102(c): 'Repairs necessary to remove health and safety hazards may be made to mobile or manufactured homes provided'; 'The applicant owns the home and site and has occupied the home prior to filing an application with RHS'; 'is on a permanent foundation or will be put on a permanent foundation with section 504 funds' · Checked October 31, 2026

6. Under the regulation (7 CFR §3550.103), to qualify you must own and live in the home; for a grant, you must be 62 or older at the time of application; at approval, the household's adjusted income must not exceed the applicable very-low-income limit; you must be a U.S. citizen or a noncitizen who qualifies as a 'legal alien' as defined in §3550.10; you must be unable to get help on reasonable terms from other sources and lack the personal resources to meet your needs; and you must have the legal capacity to take on the obligation, or a court-appointed guardian who can.

   Sources 5 · 7 CFR §3550.103(a)–(f): 'Applicants must own, as described in § 3550.107, and occupy the dwelling'; 'To be eligible for grant assistance, an applicant must be 62 years of age or older at the time of application'; 'the household's adjusted income must not exceed the applicable very low-income limit'; 'The applicant must be a U.S. citizen or a non-citizen who qualifies as a legal alien, as defined in § 3550.10'; 'Applicants must be unable to obtain financial assistance at reasonable terms and conditions from non-RHS credit or grant sources and lack the personal resources to meet their needs'; 'The applicant must have the legal capacity to incur the loan obligation or have a court appointed guardian or conservator' · Checked October 31, 2026

7. Under the regulation (7 CFR §3550.103(e)), elderly families must use net family assets over $20,000 to reduce their section 504 request, and other families must use assets over $15,000; for this rule the value of the home and a minimum adequate site is not counted.

   Sources 5 · 7 CFR §3550.103(e): 'Elderly families must use any net family assets in excess of $20,000 to reduce their section 504 request'; 'Non-elderly families must use any net family assets in excess of $15,000 to reduce their section 504 request'; 'less the value of the dwelling and a minimum adequate site' · Checked October 31, 2026

8. Under the regulation (7 CFR §3550.103(h)–(i)), for a loan you must show with a budget that you can repay it; if you fall short, a cosigner or other household members can join the application; and you need a credit history showing reasonable ability and willingness to pay debts; signs of unacceptable credit include a delinquency of more than 30 days within the last 12 months, a foreclosure completed in the last 36 months or an unresolved IRS tax lien; a bankruptcy whose debts were discharged more than 36 months before applying, or a judgment satisfied more than 12 months before, does not count against you; and if you are rejected for credit, you are told the reason and the source of the information.

   Sources 5 · 7 CFR §3550.103(h)–(i): 'Applicants must demonstrate adequate repayment ability as supported by a budget'; 'the applicant can have another party join the application as a cosigner'; 'the applicant can have other household members join the application'; 'Loan applicants must have a credit history that indicates reasonable ability and willingness to meet debt obligations'; 'the amount of the delinquency exceeded one installment for more than 30 days within the last 12 months'; 'Loss of security due to a foreclosure if the foreclosure has been completed within the last 36 months'; 'An outstanding Internal Revenue Service tax lien'; 'A bankruptcy in which debts were discharged more than 36 months prior to the date of application'; 'A non-foreclosure judgment satisfied more than 12 months before the date of application'; 'the applicant will be informed of the reason and source of information' · Checked October 31, 2026

9. Under the regulation (7 CFR §3550.10), 'legal alien' refers to any person lawfully admitted to the country who meets the criteria in section 214 of the Housing and Community Development Act of 1980 (42 U.S.C. §1436a).

   Sources 2 · 7 CFR §3550.10, Definitions: 'Legal alien. For the purposes of this part, legal alien refers to any person lawfully admitted to the country who meets the criteria in section 214 of the Housing and Community Development Act of 1980, 42 U.S.C. 1436a' · Checked October 31, 2026

10. Under the statute (42 U.S.C. §1436a(a)), assistance may go to a noncitizen only if they are a resident of the United States and fall into one of these categories: lawfully admitted for permanent residence; entered before June 30, 1948 and deemed a permanent resident by the Attorney General; lawfully present after admission as a refugee or a grant of asylum that has not been terminated; lawfully present through parole for emergent reasons or reasons strictly in the public interest (section 212(d)(5) of the immigration law); lawfully present because deportation is being withheld; lawfully admitted for temporary or permanent residence under section 245A of the immigration law; or lawfully resident under the Compacts of Free Association with the Marshall Islands, Micronesia and Palau.

    Sources 14 · 42 U.S.C. §1436a(a)(1)–(7): 'may not make financial assistance available for the benefit of any alien unless that alien is a resident of the United States and is'; 'an alien lawfully admitted for permanent residence as an immigrant'; 'an alien who entered the United States prior to June 30, 1948'; 'pursuant to an admission under section 1157 of title 8 or pursuant to the granting of asylum (which has not been terminated)'; 'as a result of an exercise of discretion by the Attorney General for emergent reasons or reasons deemed strictly in the public interest pursuant to section 1182(d)(5) of title 8'; 'as a result of the Attorney General’s withholding deportation'; 'an alien lawfully admitted for temporary or permanent residence under section 1255a of title 8'; 'under section 141 of the Compacts of Free Association' · Checked October 31, 2026

11. Under the same statute (42 U.S.C. §1436a(b)), that restriction applies to assistance under several programs, including section 1474 of title 42, the law behind the section 504 repair loans and grants; and if at least one family member's eligibility has been established and other members' ineligibility has not, the assistance is prorated based on the number of eligible people compared with the whole family.

    Sources 14 · 42 U.S.C. §1436a(b)(1)–(2): 'the direct loan program under section 1472 of this title or section 1472(c)(5)(D), 1474, 1490a(a)(2)(A), or 1490r of this title'; 'If the eligibility for financial assistance of at least one member of a family has been affirmatively established'; 'any financial assistance made available to that family by the applicable Secretary shall be prorated' · Checked October 31, 2026

12. Under the regulation (7 CFR §3550.10), the 'household' is everyone expected to live in the home, except live-in aides and foster children or adults; the 'very low-income' limit is an adjusted income limit developed in consultation with HUD; an 'elderly family' includes a head, spouse or sole member who is 62 or older or disabled, or two or more people living together at least one of whom is 62 or older or disabled; and a 'rural area' is one defined in section 520 of the Housing Act of 1949.

    Sources 2 · 7 CFR §3550.10, Definitions: 'Household. All persons expected to be living in the dwelling, except for live-in aids, foster children, and foster adults'; 'Very low-income. An adjusted income limit developed in consultation with HUD'; 'A person who is the head, spouse, or sole member of a family and who is 62 years of age or older, or who is disabled'; 'Two or more persons who are living together, at least 1 of whom is age 62 or older, or disabled'; 'Rural area. An area defined in section 520 of the Housing Act of 1949, as amended' · Checked October 31, 2026

13. Under the regulation (7 CFR §3550.107), you must have an acceptable ownership interest, which can be full ownership with a deed; a secure written lease (for a grant, with at least 5 years remaining); a life estate that gives you possession and use; an undivided interest in a shared property, if there is no reason to think your position as owner-occupant is at risk; a land purchase contract, if you are current on the payments; and, if those documents are not available, USDA may accept other evidence: local tax records showing you as owner and that you pay the taxes, affidavits from people in the community that you have lived there as the apparent owner for at least 10 years, or any document commonly accepted as evidence of ownership, recorded or not.

    Sources 8 · 7 CFR §3550.107(a)–(g): 'Acceptable full fee ownership is evidenced by a fully marketable title with a deed'; 'For grants, the remaining lease period must be at least 5 years'; 'a life estate interest must provide the applicant with rights of present possession, control, and beneficial use of the property'; 'An undivided interest is acceptable if there is no reason to believe that the applicant's position as an owner-occupant will be jeopardized'; 'A land purchase contract is acceptable if the applicant is current on all payments'; 'Records of the local taxing authority that show the applicant as owner and that demonstrate that real estate taxes for the property are paid by the applicant'; 'Affidavits by others in the community stating that the applicant has occupied the property as the apparent owner for a period of not less than 10 years'; 'Any instrument, whether or not recorded, which is commonly accepted as evidence of ownership' · Checked October 31, 2026

14. Under the regulation (7 CFR §§3550.105 and 3550.106), loans are made only in areas the Rural Housing Service designates as rural, and if an area becomes nonrural an existing borrower can still receive 504 assistance; the site must not be large enough to subdivide into more than one site under local zoning; the home must be modest for the area and not designed to produce income; after repairs the home may not still have major health or safety hazards, although not every hazard has to be removed; and all work must meet local building codes.

    Sources 7 · 7 CFR §3550.105–§3550.106: 'Loans may be made only in rural areas designated by RHS'; 'If an area designation is changed to nonrural an existing RHS borrower may receive 504 assistance'; 'The site must not be large enough to subdivide into more than one site under existing local zoning ordinances'; 'The property must be one that is considered modest for the area, must not be designed for income producing purposes'; 'nor must all existing hazards be removed'; 'the dwelling may not continue to have major health or safety hazards'; 'All work must be completed in accordance with local construction codes and standards' · Checked October 31, 2026

15. Under the regulation (7 CFR §3550.112), the total of a household's outstanding 504 loans on one home may not exceed an amount USDA sets based on factors such as average loan amounts and repair costs, and never more than 20% of the national average area loan limit; the loan is also limited to what you can repay at 1% interest over 20 years; and the lifetime total of grants to a household or a home may not exceed 10% of that national average limit.

    Sources 10 · 7 CFR §3550.112(a)–(c): 'The sum of all outstanding section 504 loans to one household for one dwelling may not exceed an amount determined by the Agency based on factors such as average loan amounts and repair costs, but no greater than twenty percent of the national average area loan limit'; 'to repay a loan at 1 percent interest with a 20-year term'; 'The lifetime total of the grant assistance to any one household or one dwelling may not exceed ten percent of the national average area loan limit' · Checked October 31, 2026

16. Under the regulation (7 CFR §3550.113), the interest rate on all section 504 loans is 1 percent and the repayment period is 20 years.

    Sources 11 · 7 CFR §3550.113(a)–(b): 'The interest rate for all section 504 loans will be 1 percent'; 'The repayment period for all section 504 loans will be 20 years' · Checked October 31, 2026

17. Under the regulation (7 CFR §3550.114), grant recipients sign a repayment agreement saying the full grant must be repaid if the property is sold less than 3 years after the grant agreement was signed.

    Sources 12 · 7 CFR §3550.114: 'Grant recipients are required to sign a repayment agreement which specifies that the full amount of the grant must be repaid if the property is sold in less than 3 years from the date the grant agreement was signed' · Checked October 31, 2026

18. Under the regulation (7 CFR §§3550.108 and 3550.110), when total section 504 debt is $7,500 or more, the property is secured by a mortgage (or by the leasehold or land purchase contract); USDA does not require a first lien, but total debts on the property may not exceed its value; if your secured debt is over $15,000 at loan approval, you must keep hazard insurance on the property; and if the property is in a FEMA Special Flood Hazard Area, you must carry flood insurance for the life of the loan.

    Sources 9 · 7 CFR §3550.108: 'When the total section 504 indebtedness is $7,500 or more, the property will be secured by a mortgage on the property, leasehold interest, or land purchase contract'; 'RHS does not require a first lien position, but the total of all debts on the secured property may not exceed the value of the security'; 7 CFR §3550.110: 'Any borrower with a secured indebtedness in excess of $15,000 at the time of loan approval must furnish and continually maintain hazard insurance'; 'Flood insurance must be obtained and maintained for the life of the loan for all property located in Special Flood Hazard Areas' · Checked October 31, 2026

19. Under the regulation (7 CFR §3550.104), you must file a complete written application in the format the Rural Housing Service specifies, and applications are accepted even when funds are not available; incomplete applications are returned in writing with what is missing; the Service may ask you in writing to reconfirm your interest and withdraw your application if you do not respond in time; you are told in writing whether you are eligible, and if not, why; and when funds are short, applications to remove health and safety hazards get priority, veterans get preference among equal applications received the same day, and then requests are funded first-come, first-served.

    Sources 6 · 7 CFR §3550.104(a)–(c): 'All persons applying for section 504 loans or grants must file a complete written application in a format specified by RHS'; 'Applications will be accepted even when funds are not available'; 'Incomplete applications will be returned to the applicant specifying in writing the additional information that is needed'; 'RHS may periodically request in writing that applicants reconfirm their interest'; 'Applicants who are eligible will be notified in writing'; 'Applicants who are ineligible will be notified in writing and provided with the specific reasons for the rejection'; 'applications for assistance to remove health and safety hazards will receive priority for funding'; 'preference will be extended to applicants qualifying for a veterans' preference'; 'funded on a first-come, first-served basis' · Checked October 31, 2026

20. Under the regulation (7 CFR §3550.4), when the Rural Housing Service makes a decision against you, it must give you written notice of the decision and of your right to a hearing before USDA's National Appeals Division; and any adverse decision, appealable or not, may be reviewed by the next-level supervisor.

    Sources 1 · 7 CFR §3550.4: 'Whenever RHS makes a decision that is adverse to a participant, RHS will provide the participant with written notice of such adverse decision and the participant's rights to a USDA National Appeals Division hearing'; 'Any adverse decision, whether appealable or non-appealable may be reviewed by the next-level RHS supervisor' · Checked October 31, 2026

21. Under the regulation (7 CFR §§3550.115 to 3550.119), Water and Waste Disposal (WWD) grants to individuals help residents of colonias along the U.S.–Mexico border connect to community water and sewer systems; they can pay, among other things, for service lines to the home, connection to the home's plumbing, connection fees and basic plumbing in a home that lacks it; the lifetime total may not exceed $5,000; applicants need not be 62; they must own and live in a home in a colonia; and the whole household's taxable income must be below the most recent Department of Health and Human Services poverty guidelines.

    Sources 13 · 7 CFR §§3550.115–3550.119: 'to facilitate the use of community water and waste disposal systems by the residents of colonias along the border between the U.S. and Mexico'; 'Extend service lines from the system to their residence'; 'Connect service lines to residence's plumbing'; 'Pay reasonable charges or fees for connecting to a system'; 'Pay for necessary installation of plumbing and related fixtures within dwellings lacking such facilities'; 'may not exceed a cumulative total of $5,000'; 'An applicant need not be 62 years of age or older'; 'Own and occupy a dwelling located in a colonia'; 'below the most recent poverty income guidelines established by the Department of Health and Human Services' · Checked October 31, 2026

22. According to USDA's eligibility site, it is used to evaluate the likelihood that a potential applicant would be eligible; for many USDA loans, household income must meet certain guidelines and the property must be in an eligible rural area; it has sections to check property eligibility and to assess a household's potential eligibility; and to get more information and contact a USDA program representative, you use the site's Contact Us link.

    Sources 15 · USDA Income and Property Eligibility Site: 'This site is used to evaluate the likelihood that a potential applicant would be eligible for program assistance'; 'household income must meet certain guidelines'; 'located in an eligible rural area as defined by USDA'; 'To determine if a property is located in an eligible rural area'; 'To assess potential eligibility of an applicant/household'; 'For additional information and to contact a USDA Program Representative, click on the Contact Us link above' · Checked October 31, 2026

23. The Legal Services Corporation (LSC) has a search tool: you enter an address or city and it shows an LSC-funded legal aid organization near you.

    Sources 16 · I Need Legal Help: 'enter an address or city below to find an LSC-funded legal aid organization near you' · Checked October 31, 2026