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The Ins and Outs of Home Repair Grants


Home repair grants

If you're looking to make some upgrades to your home, it can quickly become expensive.  And, unfortunately, it may cost more than you can afford.

Luckily, even if money is tight, you might be able to check off some items from your to-do list thanks to federal home repair grants.

How are they different from loans?

Unlike a loan, you never have to pay grant money back.  As a result, though, the money can only be used for specific types of repairs and renovations.

Who qualifies for home repair grants?

The program is run by the United States Department of Agriculture.  Officially, it's known as the Rural Development Very Low-Income Housing Repair Program.

The name alone should indicate who this program is designed to benefit.

In order to qualify for a housing repair grant, you must meet all of the following requirements:

•    Be at least 62 years old,  a U.S. citizen, and own your home

•    Have an income that is less than 50% of the median income in your home county

•    Show proof that you are unable to obtain affordable credit elsewhere

•    Be deemed (by the USDA) as financially unable to pay back a Section 504 loan, which is 1% interest over 20 years for the cost of the needed repairs

•    Use the money for necessary and needed repairs that will remove safety or health concerns

If you don't meet all of these requirements, it's likely the USDA will give you a loan instead of a grant, or a combination of the two.

What if you meet them all? What's next?

You have to understand the rules that come with these grants.

This program is designed to help people make necessary repairs to their home, who otherwise couldn't afford to do so.  For example, the money can used to remove asbestos, repair leaking pipes, replace molded floorboards, etc.

The money CANNOT be used to add things that aren't absolutely necessary.  So, if you want to put in a swimming pool, build a porch, or get granite kitchen countertops, you'll be out of luck.

And remember, the government will be keeping a watchful eye over the repairs you make, so don't try to sneak anything by them!  In fact, you've got to account for every dollar you spend.

You also have to cross all of your T's and dot all of your I's when it comes to safety.  All of your repairs have to meet local codes and standards.  And, certain repairs -- like the installation of water and waste systems -- must also meet your local Health Department codes.

How much money can you get?

Grants up to $7,500 are available.  You won't have to pay it back unless you decide to sell your home within three years of getting the money.   

If the USDA decides that you're capable of paying back a portion of a loan, a combination loan/grant may be offered to you.  Loans and grants can be combined for up to $27,500 in assistance, and all loans must be paid back with 1% interest over 20 years.

How do you apply?

The easiest and most user-friendly way to contact the USDA is to visit their website, www.usda.gov/wps/portal/usda/usdahome or you can call their information hotline at (202) 720-2791.

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