(DailyChive.com) – “It’s a bit of a fixer-upper” is the catchphrase uttered by people far and wide when they ultimately decide to purchase a home “as-is.” They buy it with full knowledge that they will need to put some repair and maintenance work into the home to get the most value out of it. While it all sounds great on paper, some people run into issues related to obtaining the financing necessary to make the repairs they need to make. However, there are federal programs that can help you complete the repairs you need to complete — including the Section 504 Home Repair Program.
Why Does The Section 504 Program Exist?
One of the main reasons why the government has opened a loan program to assist homeowners with the repairs that they need to be done is because none of us want to see anyone in hazardous living conditions. Repairs that are left undone due to financial constraints can potentially get worse and may even create a hazardous situation for the occupants of the house.
The USDA describes the program in the following terms:
known as the Section 504 Home Repair program, this provides loans to very-low-income homeowners to repair, improve or modernize their homes or grants to elderly very-low-income homeowners to remove health and safety hazards.
Those who are unable to come up with the funds for themselves to work on home repairs can potentially tap this program to get the money they need to get it done.
Who Can Apply for This Program?
This program is only open to certain individuals. Keeping the applicant numbers under control ensures that there are enough funds for everyone who legitimately needs this program. Some of the requirements that must be met to get a loan include:
- You must be the homeowner and you must occupy the home (it cannot be an investment property)
- You must be unable to obtain afford credit elsewhere
- Your household income cannot exceed a low limit set by the county
- For grants, you must be 62 years of age or older
These requirements are strict because this is a much cheaper way to repair ones home, and it is necessary that the government keeps the number of applicants at bay. That said, you should not let this scare you off from applying for this type of loan. If you meet the requirements, you will be approved. If you don’t, you will be informed that you don’t qualify at this time. No harm, no foul.
What are the Terms of the Loan?
Certain terms and conditions have been established for these types of loans. The standards include:
- Maximum loan amount: $40,000
- Maximum grant amount: $10,000
- Loans and grants can be combined for a grand total of $50,000
- Loan term is 20 years
- The interest rate is a fixed 1%
- The lifetime limit on grants is $10,000
- The grant must be repaid if the property is sold within 3 years of receiving it
What you can see through all of this is that the government seeks to offer affordable funds to those who could not otherwise afford it. At the same time, there are common sense limitations to these loans and grants so they aren’t taken advantage of. The home repairs purchased via this loan and grant program are meant to make a dwelling more suitable for the people that live there. They are NOT meant to be used as loans to increase the value of the property for investment purposes.
Those who use these loans for their designed purpose can make their homes safer. If this is something that might help you out, check your eligibility today and apply.
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