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Rural Housing Assistance Programs

The US Department of Agriculture administers a range of programs designed to support low income rural Americans. We review the housing programs and how you may be able to benefit from them.

Rural Housing Benefits and Assistance
The U.S. Department of Agriculture (USDA) Rural Development provides financial assistance to rural Americans through over fifty programs. Over the last few decades, millions of residents of rural towns, villages, and communities have received help either through loans or grants. Rural housing assistance is intended to make sure that low- and very low-income individuals have decent, safe, sanitary living environments, through low interest loans for purchase or repair of a home, rental assistance, and farm labor housing loans and grants. Here's a closer look at a few specific USDA rural projects.

Single Family Direct Home Loans
Direct home loans provide a pathway to homeownership for eligible recipients in designated rural areas. You might be surprised at how many US counties qualify. To view a list of qualifying areas click here (PDF). In many states, the entire state qualifies except for 2-3 counties. The amount of a qualifying loan is determined by the recipient's adjusted family income, assets, and existing debts.

To be eligible, recipients must be without decent, safe, sanitary housing and be unable to obtain a loan with suitable terms from a conventional lender. Direct home loans are intended to be for the recipient's primary residence, and the recipient must have the legal capacity to take on debt obligations. Recipients must be US citizens or eligible non-citizens who have not been suspended from federal programs.

Direct home loans can be used to build, repair, renovate, relocate, purchase and prepare a site, or to provide water and sewage. The usual terms of the loan are a 20 to 33-year payback at 1% interest. The house itself must meet local eligibility standards.

It is important to note the difference between a loan and a grant. In most situations, a grant does not have to be repaid unless the property is sold in less than three years. A loan must be repaid in part or in full when the title transfers or when the recipient of the loan is no longer living at the residence.

Farm Labor Housing Loans and Grants
Labor housing loans and grants are intended for the development of residences for domestic farm laborers, including those who work in aquaculture such as fish or oyster farms, or those who do on-farm processing. The laborers may be year-round, migrant, or seasonal; and the funding may be used to buy, build, improve, or repair living spaces. The loan can pay for up to 90% of the cost of the project.

Labor housing subsidies are released to farmers, associations of farmers, family farm corporations, Indian tribes, nonprofit organizations, public agencies, and associations of farm workers. The individual or association then uses the subsidy to build housing for laborers. Terms are similar to direct home loans: up to 33-year payback at 1% interest. Interestingly, not just rural areas, but some urban areas can qualify when there is a need for additional suitable housing.

Rental Assistance
USDA Rural Development provides vouchers, subsidies, and rental assistance to landlords for their low-income tenants. Find your state office by clicking here. The subsidies do come with qualifications. Only residences with a USDA housing mortgage qualify for rural rental assistance, and assistance has a time limit of 25 years. The subsidy is designed to insure that tenants do not have to pay more than 30% of their adjusted household income on housing and related costs such as utilities. The subsidy may be used to modernize and improve the quality of the units.

Multi-family Housing Rental Assistance
The multi-family project differs little from other rental assistance programs. It provides payments in the form of vouchers to owners of new or existing USDA-financed Rural Rental or Farm Labor Housing so that low- and very low-income tenants can find a dwelling that's affordable. The projects must be nonprofit or limited profit to receive funding. To visit the USDA website click here.

Single-Family Housing Repair Loans and Grants
Loans up to $20,000 and grants up to $7,500 are available to low-income homeowners so that they can stay in their homes and make repairs, improvements, or needed modernization. Seniors may be eligible for grants for health and safety modifications. Some stipulations apply. The homeowner must occupy the home, be unable to get affordable credit elsewhere, and have a family income below 50% of the area median income. You can learn if your area is eligible by clicking here.

Rural assistance is similar to other government programs which are federally funded and state administered. Each state has jurisdiction to determine how funds can be spent. Some states are able to provide grants that don't have to be repaid while other states with greater demand provide very few grants but can help with low interest loans. The best way to get accurate information about what is available in your area is to contact your local agency. The USDA website has a wealth of information and can be viewed by clicking here.

If you live in a rural area and are in need of a living space, or if you would like to make safe, suitable housing available to low-income families in your community, one of the many programs offered through the USDA Rural Development may help. Every day, subsidies are helping residents of small towns secure something affordable, stay in their homes, and keep them in good condition.