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Catalog of Federal Domestic Assistance

Program Descriptions

10.417:  Very Low-Income Housing Repair Loans and Grants

Popular Name:  Section 504 Rural Housing Loans and Grants

Objectives:  To give very low-income rural homeowners an opportunity to make essential repairs to their homes to make them safe and to remove health hazards to the family or the community.

PROGRAM AND AWARD	FINANCIAL AND INFORMATION CONTACTS
ELIGIBILITY REQUIREMENTS	FINANCIAL AND ADMINISTRATIVE INFO.
APPLICATION AND AWARD PROCESS	INFORMATION CONTACTS
RELATED PROGRAMS	ASSISTANCE CONSIDERATIONS
PROGRAM ACCOMPLISHMENTS	POST ASSISTANCE REQUIREMENTS

10.417 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Applicants must own and occupy a home in a rural area; and be a citizen of the United States or reside in the United States after having been legally admitted for permanent residence or on indefinite parole. Loan recipients must have sufficient income to repay the loan. Grant recipients must be 62 years of age or older and be unable to repay a loan for that part of the assistance received as a grant. Applicant's income may not exceed the very low-income limit set forth in RD Instructions. Very low-income limits range from $6,300 to $22,650 for a single person household, depending on an area's median income.

Beneficiary Eligibility:  Applicants must own and occupy a home in a rural area; and be a citizen of the United States or reside in the United States after having been legally admitted for permanent residence or on indefinite parole. Loan recipients must have sufficient income to repay the loan. Grant recipients must be 62 years of age or older and be unable to repay a loan for the part of the assistance received as a grant. Applicant's income may not exceed the very low-income limit set forth in RD Instructions.

Credentials/Documentation:  Evidence of ownership and verification of income and debts. Grant recipients must provide evidence of age. This program is excluded from coverage under OMB Circular No. A-87.

10.417 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  None. This program is excluded from coverage under OMB Circular No. A-102 and E.O. 12372.

Application Procedure:  Applicants must file an application form at the RHS/Rural Development field office serving the county where the dwelling is located. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedure:  Delegated to Community Development Manager.

Deadlines:  None.

Range of Approval/Disapproval Time:  From 30 to 60 days from time applications are filed if no backlog of applications exists. Applications for assistance far exceed available funding. There is generally a waiting list for funding.

Appeals:  Agency regulations providing customers with the rights for an informal review, mediation or alternative dispute resolution (ADR), or appeal to the National Appeals Division (NAD) are contained in 7 CFR Part 3550. NAD regulations are found at 7 CFR Part 11. Requests for an informal review, mediation and ADR must be received within 30 days from the date of the adverse decision. Requests for an appeal to NAD must be received within 30 days of receipt of the adverse decision.

Renewals:  Applicants may reapply at any time.

Criteria for Selecting Proposals:  Not applicable.

Examples of Funded Projects:  Not applicable.

Range and Average of Financial Assistance:  Loans to $5,388; Grants to $4,547 as of August 10, 1998.

10.417 RELATED PROGRAMS:

• 10.410 Very Low to Moderate Income Housing Loans.

10.417 PROGRAM ACCOMPLISHMENTS:

In fiscal year 1999, 9,075 existing houses were improved through the Section 504 loan and grant programs.

10.417 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  RURAL HOUSING SERVICE (RHS) (DEPARTMENT OF AGRICULTURE )

Type of Assistance:  Direct Loans; Project Grants.

Obligations:  (Loans) FY 99 $24,965,000; FY 00 est $32,396,000; and FY 01 est $40,000,000. (Grants) FY 99 $20,230,000; FY 00 est $25,651,000; and FY 01 est $30,000,000.

Budget Account Number:  (Loans) 12-4141-0-3-371; 12-2081-0-1-371; (Grants) 12-2064-0-1-604.

Authorization:  Housing Act of 1949, Title V, Section 504, as amended, Public Laws 89-117, 89-754, and 92-310, 42 U.S.C. 1474.

Regulations, Guidelines, and Literature:  7 CFR Part 3560, Direct Single Family Housing Loans and Grants. (no charge); Home Improvement and Repair Loans, PA-1184, no charge.

10.417 INFO CONTACTS:

Regional or Local Office:  Consult your local phone directory for Rural Development county office number. If no listing, contact the appropriate Rural Development State office listed in Appendix IV of the Catalog or on the internet at www.rurdev.usd.gov/recd_map.html.

Headquarters Office:  Director, Single-Family Housing Processing Division, Rural Housing Service, Department of Agriculture, Washington, DC 20250. Phone: (202) 720-1474. Use the same number for FTS. (Home Page)

(See Appendix IV for more contact info.)

10.417 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  This program has no matching requirements. This program has no statutory formula. The following basic formula criteria are to allocate program loan funds to various States: (A x .50 + B x .50)x funds available = State basic formula allocation. Where "A" is State's percentage of national number of rural occupied units; and "B" is State's percentage of national number of rural households below 50 percent of area median income. The formula for grants is: (A x 1/3 + B x 1/3 + C x 1/3)x funds available = State basic allocation. Where "C" is State's percentage of national rural population 62 years of age and older. The data source for each of these criteria are based on the latest census data available.

Length and Time Phasing of Assistance:  This assistance is available throughout the year by means of an established allocation system. Funds are usually released to borrowers/grantees as a lump sum payment for completed repairs or, as needed, for repairs in progress.

Uses and Use Restrictions:  To assist very low-income owner-occupants in rural areas to repair or improve their dwellings. Grant funds may only be used by senior citizens (age 62 and older) to make such dwellings safe and sanitary and to remove health and safety hazards. This includes repairs to the foundation, roof or basic structure as well as water and waste disposal systems, and weatherization. Loans bear an interest rate of one percent and are repaid over a period of up to 20 years. In addition to the above purpose, loan funds may be used to modernize the dwelling. Maximum loan amount cannot exceed a cumulative total of $20,000 to any eligible person and maximum lifetime grant assistance is $7,500 to any eligible person 62 years of age or older for home improvement. The house must be located in a place which is rural in character and does not exceed 10,000 population. Some places with population between 10,000 and 25,000 may be eligible if not within a Metropolitan Statistical Area (MSA). Assistance is available in States, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of Northern Mariana's, and the Trust Territories of the Pacific Islands.

10.417 POST ASSISTANCE REQUIREMENTS:

Reports:  None.

Audits:  None.

Records:  Borrowers and/or grantees are not required to, but should retain copies of loan or grant-related documents.