Section 504 Home Repair Program (Everything You Need to Know)

Section 504 Home Repair Program

Repairs to your home are inevitable at some point, especially if you live in an older house. People who dwell in some of these old houses are in danger and putting their lives in jeopardy.

Repairing these houses can be expensive, especially for people with little financial ability.

Research shows that poor housing conditions have been linked to various health problems, including respiratory infections, asthma, injuries, and mental health problems.

However, thanks to the Section 504 Home Repair Program, you may take care of your home repairs while still thinking of your health. To be eligible for this program, you must meet specific criteria.

Continue reading to learn more about this program and see whether you are eligible for the program.

What Is the Section 504 Home Repair Program? What Does It Entail?

The Section 504 Home Repair Program, also referred to as the Single-Family Housing Repair Loans & Grants, is a federal program that deals with loans and grants. It provides funding for home repairs and modifications to make a home accessible and safe to people with disabilities, seniors, and low income.

The program receives funds from the U.S. Department of Housing and Urban Development (HUD) and is administered by state agencies. State agencies provide funds for eligible projects in their states.

This program provides items or services necessary to make the dwelling safe, sanitary, and accessible as determined by the nature of the situation.

From the Rehabilitation Act to the ADA

It was created by the Rehabilitation Act of 1973, amended by the Americans with Disabilities Act (ADA) of 1990.

Some of the repairs you can do under this program are roofing, painting, plumbing, and electrical work. Eligible homeowners can also receive funding for wheelchair ramps, bathroom modifications, and other necessary home repairs.

If you are qualified for this program, you can apply for a housing repair loan. The U.S. Department of Housing and Urban Development (HUD) defines a housing repair loan as a “short-term, low-interest mortgage loan.” It’s for making necessary repairs to improve the housing for sale or make it safe.

HUD also provides grants for housing rehabilitation projects together with other community partners. These programs are available nationwide, but funding availability varies by state. You can only use the grant money to get rid of any health or safety vulnerabilities in your house.

Maximum Loan and Grant Amounts:

  • The maximum loan amount is $20,000
  • The total grant amount is $7,500
  • The ultimate combination is $27,500 (loan and grant amounts)
  • These are fixed-rate loans with a maximum amortization of 20 years at 1% interest

The program is not based on the severity of the disability but on the functional limitations created by the disability.

It’s important to keep in mind that you don’t have to repay the grant. However, if you sell your home that you repaired with a section 504 grant before a three-year period has passed, you must repay the money in full.

What Are the Benefits of This Program?

  • The program helps homeowners with low income and disabilities make their homes safer and more accessible.
  • The program is a great way to keep the value of your home in line with other homes in your neighborhood.
  • You live in your own home independently.
  • You can receive financial help for needed repairs to your home. This can happen without the expense of hiring a contractor or waiting for an insurance company to approve the payment.
  • You get to improve your home safety and stay stress-free, knowing there’s no risk of accidents.

Qualifications for the Section 504 Home Repair Program

Not everybody is granted home repairs loans and grants. To qualify for Single-Family Housing Repair Loans & Grants, you must meet the following requirements:

  • Be a U.S. citizen or have eligible status as an immigrant
  • Meet the USDA’s income qualifying guidelines.
  • Your home must be in the rural areas
  • You are unable to obtain credit elsewhere
  • Have a disability as defined by the Americans with Disabilities Act
  • Your home must need repairs that are essential for the health and safety of you and your family
  • The repairs must be necessary to allow you to live in your home safely and independently
  • Have an income below 50% of the Area Median Income (AMI) guidelines
  • You must be able to repay the loan through your monthly income and assets
  • You are a senior with low income and living in the rural areas
  • The property must be your primary residence and occupied by you as your primary residence

Which Repairs Can You Do with the Section 504 Loan and Grant?

You are only to use Single-family housing repair loans & grants solely to improve your house living conditions and make it a safe place to dwell in. Here are some repairs or improvements you can do in your home with the loan and grant:

  • Designing a good water system
  • Roof repairs
  • Repairing any electrical issue
  • Replacing or adding windows
  • Addition of wheelchair ramps
  • Installing grab bars in bathrooms
  • Widening doorways and hallways
  • Building a new room to meet your family’s needs
  • Setting up an energy system that can use solar energy

What You Cannot Do with the Section 504 Loan and Grant?

Some of the most common ineligible loan purposes are:

  • Furniture addition
  • Income-producing property
  • Funding a home in a flood hazard area
  • Adding a building to your home for other use other than accommodating the family.
  • Adding luxurious items such as a swimming pool, hot tub, or tennis court
  • Refinancing for any reason other than to take out cash for repairs. For example, the homeowner refinancing to consolidate debt, reduce monthly payments or lower interest rates.

How to Know if Your Area Is Eligible for the Program

If the population of your rural region is fewer than 35,000, it qualifies for the Section 504 home repair program. Go online and look up your home’s address to see if you’re eligible.

Steps for Applying for Section 504 Home Repair Program

You start by filling out a form and submitting it to your local HUD office to apply for the Single-Family Housing Repair Loans & Grants. You can download the application from the HUD website or call HUD and request that one be sent to you.

Your income, assets, residence, and proof of disability will all be requested on the application. You also need to submit documentation of the necessary repairs. Additionally, you must meet the Section 504 Home Repair program criteria for you to apply.

Here are some forms that you’re required to fill out the following forms:

  • 410-4, “Uniform Residential Loan Application”
  • 3550-1 “Authorization to Release Information” for each adult household member.
  • 3550-4, “Employment & Asset Certification” for each adult household member

When they accept your application, they will assign you a local community agency to help you with the process. Also, if they approve you for the Section 504 Home Repair Program, your community agency will help you apply for a loan to pay for the repairs.

Is There a Deadline for Applying for the Section 504 Home Repair Program?

There is no set deadline to apply for the Section 504 home repair program. The first-come, first-served policy applies to all applications.

It’s worth noting, though, that funding for the initiative is limited. So it’s good for applicants to apply as soon as possible.

Also, applicants affected by natural disasters such as firestorms, dust storms, floods, hurricanes, and tornadoes can be given priority in receiving the funds.

Bottom Line

The Section 504 Home Repair Program looks at solving home repair problems for homeowners such as seniors, low-income earners, and disabled individuals. This program offers low-interest loans to those who qualify, so be sure to check it out if you need help with your home repairs.

In case you have any queries, you can contact the USDA home loan specialist in your area or visit the USDA website for more information.