Federal home grant and loan funds available from USDA

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By Caroline Rosacker

Home repair financing is available from USDA Rural Development in Iowa. The Section 504 Home Repair program provides loans to very low-income homeowners to repair, improve, or modernize their homes, or provides grants to elderly, very low-income homeowners to remove health and safety hazards. 

Repair examples include roof, furnace, water heater, A/C systems, sewer and water systems, windows, storm doors, plumbing, electrical, insulation, ramps, handrails, and walk-in tub/shower. 

Who can apply?

To qualify you must be the homeowner and occupy the house, be unable to obtain affordable credit elsewhere, have a family income within the very low income limit, and for grants be age 62 or older and not be able to repay a repair loan. 

Eligible areas

Eligible properties must be located in a qualified rural area. A complete list can be found at 

"Locally, Clayton, Delaware and Allamakee County are eligible," said Kari Harbaugh, GMHC Family Resource Director. "Loans can be used to repair, improve, or modernize homes, or to remove health and safety hazards. Grants must be used to remove health and safety hazards." 

Available amounts

Maximum loan limit is $40,000 at a one percent fixed interest rate paid over 20-years. Full title service is required for loans greater than $25,000. 

Maximum grants have a lifetime limit of $10,000 and must be repaid if the property is sold in less than three years. Loans and grants can be combined for up to $50,000 dollars in assistance. If applicants can repay part, but not all of the costs, they may be offered a loan and grant combination. 

Application process

Applications are available year-round as long as funding is available. They are processed in the order they are received. 

Approval times depend on funding availability in your area. To contact a USDA home loan specialist online at "We are happy to help walk you through your application if you need assistance," said Harbaugh.


Section 504 loan or grant funds cannot be used to:

• Assist in the construction of a new dwelling.

• Make repairs to a dwelling in such poor condition that when the repairs are completed, the dwelling will continue to have major hazards. 

• Move a mobile home or manufactured home from one site to another. 

• Pay for any off-site improvement except for necessary installation and assessment cost for utilities. 

• Refinance non-Agency debt or obligation that the applicant incurred before the date of application (Except for payment of the installation and assessment costs of utilities); or 

• Pay packaging fees to for-profit entities (Non-profit packaging fees may be paid by 504 loan or grant funds). 

Mobile or manufactured homes 

Section 504 loan and grant funds can be used to repair mobile or manufactured homes if: 

• The applicant owns the home and the site and occupied the home prior to filing an application. 

• The repairs are needed to remove health or safety hazards; and 

• The home is on a permanent foundation or will be put of a permanent foundation with Section 504 funds. 

A permanent foundation is either a full below-grade foundation or blocks, piers, or some other type of foundation with skirting, and anchoring with tie-downs. 

USDA Rural Development works to deliver quality programs that will increase economic opportunity and improve the quality of life for the 1.7 million Iowans living in rural communities. 

The agency's direct and guaranteed rural credit programs help families find affordable housing, assist businesses to create economic opportunities, and allow communities to build or improve essential infrastructure and facilities. 

USDA Rural Development is making a positive difference in America, ensuring rural communities are a healthy, safe and prosperous place to live and work. 

An application packet may be requested by calling (515) 284-444, or email Additional information can be found at

Locally contact the Family Resource Center at 514 South River Park Drive or call 563-252-3215.

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