USDA Home Repair Loans and Grants for Rural Homeowners (Section 504)
If you own and live in a home in a rural area and can't afford a repair that's making it unsafe, USDA's Section 504 program offers 1% loans and, for homeowners 62 and older, grants that don't have to be paid back. Here's who qualifies, what the money covers and how to get an application moving.
AT A GLANCE
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What Section 504 is
The official name is the Single Family Housing Repair Loans and Grants program. Most people call it Section 504, after the part of the Housing Act of 1949 that created it. USDA Rural Development runs it, and the rules are in 7 CFR Part 3550.
It does two different things. The loan side helps lower-income homeowners repair, improve or modernize their homes. The grant side is narrower. It's for older homeowners with very low income who need to fix something that's a danger to their health or safety.
Loan | Grant | |
|---|---|---|
Who | Low- and very-low-income homeowners | Very-low-income homeowners age 62 or older |
Maximum | $40,000 | $10,000 lifetime limit |
What it can pay for | Repairs, improvements, modernization, or removing hazards | Removing health and safety hazards, or making the home accessible for a household member with a disability |
Cost to you | 1% fixed interest, 20-year term | Nothing, unless you sell within 3 years |
Combined | Loan and grant together can reach $50,000 |
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Who qualifies
USDA's program page lists four basic tests. You have to:
Own the home and live in it.
Be unable to get affordable credit somewhere else.
Have household income under the county limit. USDA publishes low and very-low income limits for each county.
For a grant, be 62 or older and have income under the very-low limit for your county.
Ownership doesn't have to be a clean deed
Many rural homes have been passed down without a formal title. The regulation (7 CFR 3550.107) accepts several kinds of ownership besides full fee ownership with a deed:
A written lease. For a loan, at least 2 years must be left on it beyond the loan term. For a grant, at least 5 years must be left.
A life estate that gives you the right to live in and control the property.
A shared (undivided) interest with relatives, as long as co-owners living in the home sign the repayment agreement.
A land purchase contract, if you're current on the payments.
If none of those papers exist, USDA may accept tax records showing you as owner and showing that you pay the property taxes. It may also accept statements from people in the community that you've lived there as the apparent owner for at least 10 years.
Savings you're expected to use first
The program is meant for people who can't cover the repair themselves. Under the regulation, households where the applicant is elderly have to put net family assets above $20,000 toward the repair. Other households have to use assets above $15,000. The value of the home and a basic lot doesn't count.
Credit for the loan
Loan applicants need to show they can repay, based on a budget. If your budget falls short, a cosigner or other household members can join the application. USDA also looks at credit history. Things it treats as warning signs include:
More than one payment over 30 days late in the last year
A foreclosure completed in the last 36 months
An unpaid tax lien with no payment arrangement
Delinquency on a federal debt
A bankruptcy that was discharged more than 36 months before you apply doesn't count against you.
Grants must be used to remove health and safety hazards, and they have to be repaid only if you sell the home in less than three years.
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What the money can and can't fix
Loans can cover general repairs and improvements, as long as the house stays modest in size and design. Grants can pay only for removing identified health and safety hazards, or for repairs and remodeling that make the home accessible and usable for a household member with a disability.
Under 7 CFR 3550.102, both can also pay for some related costs:
Legal, title, appraisal, survey, environmental and closing fees tied to the loan or grant
Special design features or equipment needed because of a household member's physical disability
Connection fees and installation costs for water, sewer, electricity and gas
Property taxes due at closing, and setting up an escrow account for taxes and insurance
Packaging fees charged by tax-exempt nonprofits that help you put the application together
Mobile and manufactured homes
Repairs to remove hazards in a mobile or manufactured home are allowed if you own both the home and the land and lived there before you applied. The home also has to be on a permanent foundation, or be put on one using 504 funds.
What 504 won't pay for
Building a new house
Repairs on a home in such bad shape that it would still have major hazards afterward
Moving a mobile home to another lot
Paying off debts you had before you applied, except utility installation costs
Fees to for-profit companies for packaging or referring your application
The finished home doesn't have to meet every USDA building standard, and not every hazard has to be fixed. It can't be left with any major health or safety hazards, though. All work has to meet local building codes.
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Loan terms in plain numbers
Term | What the rules say |
|---|---|
Interest rate | 1%, fixed |
Repayment | 20 years |
Mortgage on the home | Required once your total 504 debt reaches $7,500 |
Full title service | Required if your outstanding 504 loan balance is over $25,000 |
Loan size limit | No more than your budget can repay at 1% over 20 years, and no more than $40,000 |
Grant repayment | The full grant must be repaid if you sell in less than 3 years |
A useful point from the regulation: USDA doesn't need to be first in line on your property. It can take a second mortgage behind an existing home loan, but the total debt on the property can't be worth more than the home itself.
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How to apply
Check that the address is rural. Use USDA's property eligibility map, which you can find on the program page. Enter your address or browse the map.
Find your local Rural Development office. On the program page, choose your state from the "Select your location" menu to see local contacts and any state forms.
Ask about prequalifying. It's optional, but USDA encourages it. Send the local office Form RD 3550-35 (the 504 intake form) and Form RD 3550-1 (authorization to release information).
Submit the full application. USDA lists Form RD 410-4 (Uniform Residential Loan Application), Form RD 3550-1, Form RD 3550-4 (employment and asset certification), and the documents on Attachment 12-E, the application checklist. Spanish versions of Form 410-4 and Form 3550-4 are available.
Get estimates for the work. The repair scope drives how much you'll be approved for, so ask your loan specialist what kind of bids or inspection they need.
Respond to letters quickly. If anything's missing, USDA must tell you in writing what's needed. It may also ask you to confirm you're still interested, and it can withdraw your application if you don't reply by the deadline.
Applications are accepted even when money has run out for the year. When funds are short, requests to remove health and safety hazards are funded first. If two applications with the same priority come in on the same day, a veteran gets preference.
How long it takes
USDA says approval time depends on funding in your area. If you're turned down, you'll get the specific reasons in writing. If credit was the reason, USDA has to tell you what information it relied on and where it came from.
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Before you call the local office
☐ Your property address and proof of ownership (deed, lease, land contract, or tax records)
☐ Income for everyone in the household
☐ Bank and asset statements
☐ A list of the repairs, starting with anything that's a safety hazard
☐ Your age, if you're applying for the grant
☐ Any medical or disability information if you need accessibility changes
☐ Your current mortgage or loan statements, if any
WHAT TO DO THIS WEEK
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More help
Related guides
Official sources
Last checked: October 30, 2026. Loan and grant limits, terms and forms come from the USDA Rural Development program page. Eligibility, ownership, asset and use rules come from 7 CFR 3550.102 through 3550.114.
USDA's program page and the federal regulation describe income limits a little differently. Your local Rural Development office makes the final call on income, assets and repair scope.
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