What is the Section 504 Home Repair program?

Home repairs rarely wait for a convenient moment. A failing roof, an unsafe furnace, or a bathroom you can no longer use safely becomes urgent fast, and traditional financing isn’t always within reach. The Section 504 Home Repair program from the U.S. Department of Agriculture (USDA) offers low-interest loans and grants directly to very-low-income homeowners in eligible rural areas. Rocket Mortgage doesn’t offer USDA loans of any kind, but we want you to know this option exists.

Key takeaways:

• Section 504 offers loans up to $40,000 at a 1% fixed interest rate over 20 years, plus a $10,000 grant for home improvement for eligible homeowners age 62 and older.
• Loan funds cover general repairs, improvements, and modernization. Grant funds are limited to removing health and safety hazards or improving accessibility.
• Your local USDA Rural Development office handles applications, which are accepted year-round as long as funding lasts.

What does the Section 504 Home Repair program do?

Also called Single Family Housing Repair Loans and Grants, Section 504 provides loans to very-low-income homeowners to repair, improve, or modernize their homes. It also provides grants to very-low-income elderly homeowners who can’t take on a loan so that they can remove health and safety hazards from their homes.

The program exists because rural homeowners often have fewer affordable lending options. It’s authorized by the Housing Act of 1949.

Who qualifies for Section 504 Home Repair?

USDA Section 504 Home Repair program requirements come down to what you earn, where you live, and, for grants, how old you are.

Borrower requirements

• You must own and occupy the home as your primary residence
• Be a U.S. citizen or a non-citizen who qualifies as a legal alien
• Be unable to obtain affordable credit elsewhere and lack the personal resources to cover the repairs
• Have the legal capacity to take on the loan obligation
• For loans, show repayment ability and a credit history that reflects a reasonable willingness to meet debt obligations
• For grants, be age 62 or older

Applicants with a credit score of 620 or higher generally clear the credit review without extra documentation. Below that, the USDA evaluates traditional or nontraditional credit references. Grant-only applicants don’t undergo a credit history evaluation.

Section 504 Home Repair program income limits

Your household’s adjusted income must fall at or below the very-low-income limit for your county, both at approval and at closing. The USDA sets these limits with HUD, and they vary by county and household size, so check the current figure for your area before applying.

Asset requirements

Not all your assets count toward your eligibility calculation. Only those that can be converted to cash within 60 days are included as non-retirement assets. If those assets exceed $15,000 (or $20,000 for elderly households), the excess must be applied to reduce the amount of Section 504 assistance you're requesting.

Note that your home equity is excluded from the asset calculation entirely and can't be used to test whether you have access to other credit.

Repayment ability

To qualify for a Section 504 loan, you'll need to demonstrate a reliable source of income that's sufficient to support repayment.

The USDA evaluates this using a maximum total debt (TD) ratio of 41%, which compares your total monthly debt obligations to your gross monthly income.

Property location requirements

The home must be in a USDA-eligible rural area, and it must be modest for the area, owner-occupied, and not used to produce income, which excludes rental properties such as those run by a Section 8 landlord. Enter a specific address on the USDA Income and Property Eligibility site, or see our USDA eligibility map guide for areas that generally qualify.

Grant-only requirements

At least one applicant must be 62 or older at the time of application to receive grant assistance. Grants are meant for homeowners in that age group who can’t afford to repay a loan, and the money must remove health and safety hazards or make the home usable for a household member with a disability.

What can Section 504 loans and grants be used for?

Loan funds are flexible. Grant funds are narrow. That difference drives most of the rules.

Eligible loan uses

Loan funds can cover general repairs, improvements, and modernization, including a new addition, as long as the home remains modest. They also can pay for essential equipment such as a range, refrigerator, washer, dryer, or generator when existing equipment doesn’t work. Funds also can cover site improvements like grading, walkways, or a driveway, as well as a storm shelter in tornado or hurricane areas. Funds can’t be used to build a new home, move a manufactured home, or refinance debt you took on before applying.

Eligible grant uses

Grant funds may only pay for repairs that remove identified health and safety hazards or that make a home accessible and usable for a household member with a disability. Eligible work includes wheelchair ramps, grab bars, a roll-in shower, or a walk-in bathtub. If accessibility is your main concern, also review home loans for people with disabilities.

How much money can you get through the Section 504 Home Repair program?

The main difference between the two is repayment. Loans are paid back, while grants generally are not. The dollar limits differ, too.

Section 504 loan limits and terms

The outstanding balance on all your Section 504 loans can’t exceed $40,000. The rate is fixed at 1%, and the term is 20 years. Once your total Section 504 debt reaches $7,500, the loan is secured by a mortgage. Above $25,000, full title service is required, which means working with a title company. Your repayment ability and the cost of eligible repairs also cap your actual loan amount.

Section 504 grant limits and repayment rules

Grant assistance is capped at a lifetime total of $10,000 per household or dwelling, rising to $15,000 in presidentially declared disaster areas. Grants generally don’t have to be repaid, with one exception: if you sell the home less than 3 years after signing the grant agreement, the full amount comes due.

Combining Section 504 loans and grants

Loans and grants can be combined for up to $50,000 in total assistance, or $55,000 in presidentially declared disaster areas. Grant funds are typically applied first, up to the lifetime limit, and any remaining need is evaluated as a loan.

How to apply for Section 504 Home Repair loans and grants

Before you apply, you have the option to go through an informal prequalification process to see whether the Section 504 program might be a good fit. Start by reaching out to your local Rural Development office. From there, you may be asked to provide Form RD 3550-35 (the Section 504 Home Repair Loan and Grant Program Intake Form) and Form RD 3550-1 (Authorization to Release Information). Both forms are available from the USDA.

Documents you may need

• Form RD 3550-35, Section 504 Home Repair Loan and Grant Program Intake Form (optional prequalification)
• Form RD 3550-1, Authorization to Release Information
• Form RD 410-4, Uniform Residential Loan Application
• Form RD 3550-4, Employment and Asset Certification
• The items on USDA’s Attachment 12-E checklist, including photo ID, income verification, proof of ownership, your property tax statement, itemized repair estimates, and photos of the work areas

How long will the application take?

Applications are available year-round as long as funding lasts, and they’re processed in the order received. A determination on a complete application is generally made within 30 days, though approval timelines depend on local funding. If funds run short, eligible applicants are notified of a waiting period. Requests addressing health and safety hazards get priority, and a preference for veterans breaks ties among same-day applications.

What to do if you can’t afford a home repair

Section 504 is narrow by design. If you don’t qualify, other options may fit. Home improvement grants from state and local programs can cover specific repairs. An FHA 203(k) loan rolls renovation costs into a mortgage, provided the home meets FHA minimum property standards.¹ Veterans may qualify for a VA renovation loan or for VA housing grants for accessibility work or other veteran housing benefits.² Older homeowners may also consider a single-purpose reverse mortgage. If you have equity, a home equity loan or cash-out refinance can fund larger projects.

FAQ

Here are answers to common questions about the Section 504 Home Repair program.

How do I find the Section 504 Home Repair program near me?

Contact the USDA Rural Development office serving your state or county to get the USDA Section 504 Home Repair program phone number and address for your area. That office confirms whether your address qualifies and accepts your application.

Can I apply for the Section 504 Home Repair program online?

There’s no way to complete the Section 504 Home Repair program application online. USDA forms, including the Section 504 home repair program application PDF and the loan application, are available for download, but you file the completed package through your local Rural Development office.

Is there a deadline to apply for Section 504 Home Repair assistance?

No. The USDA Section 504 Home Repair program application is accepted year-round as long as funding is available and is processed in the order received.

Can Section 504 loans and grants be combined?

Yes. Eligible applicants can combine both for up to $50,000 in assistance, or $55,000 in presidentially declared disaster areas.

Do Section 504 grants have to be repaid?

Generally, no. But if you sell the home less than 3 years after signing the grant agreement, you must repay the full grant amount.

The bottom line on the Section 504 Home Repair program

The Section 504 Home Repair program can help eligible very-low-income rural homeowners pay for repairs, improvements, modernization, and safety updates that might otherwise be out of reach. Your next step is to confirm property and income eligibility through USDA resources, then contact your local USDA Rural Development office.

Rocket Mortgage doesn’t offer USDA loans, but you can explore your borrowing options with us today.

¹Rocket Mortgage is not acting on behalf of FHA or HUD.

²Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

Rocket Mortgage is a trademark or service mark of Rocket Mortgage LLC or its affiliates.