USDA

Rural Development Housing & Community Facilities Program (HCFP)

Rural Housing Direct Loans are loans that are directly funded by the Government. To be eligible for these loans you must have very low or low income. Very low income is defined as below 50% of the area median income and low income is defined as 50-80% . These loans are commonly referred to as Section 502 loans.

Direct Loan Program (Section 502

Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase a newly constructed dwelling located in a rural area. Terms of the loans are up to 33 years and the interest rate is set by HCFP.

Under this program, housing must be modest in size, design and cost. Modest housing is property that is considered modest for the area, does not have market value in excess of the applicable area loan limit, and does not have certain prohibited features. These homes must meet all applicable local and HCFP building standards.

Mutual Self-Help Housing Program (section 523)

The Mutual Self-Help Housing Program makes homes affordable by enabling homeowners to work on homes themselves. With this investment in the home, or "sweat equity", each homeowner pays less for his or her home. Each qualified applicant is required to complete at least 65% of the work to build his or her home.

Technical Assistance Grants and Site loans are provided to non-profit and local governments to supervise enrollees in this Self Help program.

Home Repair Loan and Grant Program (Section 504)

For very low income families who own homes in need of repair, the Home Repair Loan and grant Program offers loans and grants for renovation. This program also provides funds to make a home accessible to someone with disabilities.

Homeowners 62 years and older are eligible for home improvement grants. Other low income families and individuals receive loans at a 1% interest rate directly from HCFP.