Key Takeaways
- USDA Section 504 loans lend up to $40,000 at a fixed 1% rate for 20 years to repair, improve or modernize a home you already own and live in.
- Grants of up to $10,000 are for homeowners 62 and older with very low incomes, and only to remove health and safety hazards.
- You can combine a loan and grant for up to $50,000 total; a grant must be repaid if you sell within three years.
USDA Section 504 Home Repair loans and grants help low-income homeowners in eligible rural areas fix the home they already own and live in. As of November 2026, you can borrow up to $40,000 at a fixed 1% rate for 20 years, and homeowners 62 or older with very low incomes can get grants of up to $10,000 for health and safety repairs, with a combined maximum of $50,000, according to USDA Rural Development. This program is not for buying a home.
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- USDA Section 504 home repair at a glance
- Who qualifies for a USDA Section 504 loan or grant?
- What can Section 504 money pay for?
- How to apply for USDA home repair help
- Section 504 vs. other USDA home programs
- How we got these numbers
- USDA Section 504 FAQ
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USDA Section 504 home repair at a glance
| Feature | Repair loan | Repair grant |
| Maximum amount | $40,000 | $10,000 lifetime ($15,000 in presidentially declared disaster areas, per USDA fact sheet) |
| Combined maximum | $50,000 loan plus grant | $50,000 loan plus grant |
| Who qualifies | Low-income owner-occupants unable to get affordable credit elsewhere | Owner-occupants age 62+ with very low income |
| Rate and term | Fixed 1%, 20 years | No repayment unless sold within 3 years |
| Allowed uses | Repair, improve, modernize or remove health and safety hazards | Remove health and safety hazards only |
| Where | Eligible rural areas | Eligible rural areas |
| Application window | Year-round, while funding lasts | Year-round, while funding lasts |
At a 1% fixed rate over 20 years, a $40,000 loan would cost about $184 a month in principal and interest, and a $20,000 loan about $92. These are our own estimates from standard loan math, not USDA figures, and they don’t include taxes or insurance. They are examples, not offers.
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Who qualifies for a USDA Section 504 loan or grant?
Section 504 is for current homeowners, not buyers. To be eligible, USDA says you must:
- Own the home and live in it.
- Be unable to obtain affordable credit elsewhere.
- Have household income within USDA’s county income limit. The 2025 USDA fact sheet says income must be within the very-low-income limit; USDA’s program page describes loans for low- and very-low-income homeowners. Your local office can confirm which applies to you.
- For a grant, be 62 or older and have income within the very-low-income limit.
- Own a home in an eligible rural area. You can check an address on USDA’s Income and Property Eligibility site.
Income limits vary by county and household size, and USDA updates them each year. For how USDA income limits work in general, see our guide to USDA loan income limits and eligibility.
What can Section 504 money pay for?
Loans are broad. You can use a 504 loan to repair, improve or modernize your home, or to remove health and safety hazards. Common examples include a failing roof, an old furnace, plumbing or wiring problems, or accessibility changes, though your local office decides what qualifies.
Grants are narrow. A 504 grant can be used only to remove health and safety hazards. If you sell the home within three years of getting a grant, you must repay it. The lifetime grant limit is $10,000, or $15,000 for repairing a home damaged in a presidentially declared disaster area, according to USDA’s May 2025 fact sheet.
If your total Section 504 loan balance exceeds $25,000, USDA requires full title service, which can add time and cost to closing.
How to apply for USDA home repair help
You apply through your local USDA Rural Development office, which accepts applications year-round. Approval timing depends on funding available in your area, and USDA’s program year runs Oct. 1 through Sept. 30.
- Find your local office through USDA’s state office lookup and ask about informal prequalification (encouraged but not required).
- Start with Form RD 3550-35 (intake) and Form RD 3550-1 (release authorization).
- For a full application, expect Form RD 410-4 (application), Form RD 3550-4 (employment and asset certification) and the Attachment 12-E checklist.
- Ask whether your state has added requirements; USDA notes states may set their own.
Some nonprofits and public agencies act as repair packagers that help you assemble the application. Allowable packaging fees can be included in the loan or grant.
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Section 504 vs. other USDA home programs
If you are buying a home rather than repairing one, Section 504 doesn’t apply. USDA’s purchase programs, including the guaranteed USDA loan with no down payment, are covered in our guide to USDA home loans. Those loans have their own income and location rules, and actual rates depend on your credit, property and lender.
For homeowners, the 504 program’s fixed 1% rate is well below market mortgage averages. For comparison, the national average 30-year fixed conventional purchase rate was 7.201% (7.270% APR) as of Nov. 10, 2026, per the Mortech data we track. But 504 help is limited to people who can’t get affordable credit elsewhere. If you have equity and good credit, USDA may expect you to look at other financing first.
How we got these numbers
We took loan and grant amounts, rate, term, eligibility, recapture, title and application rules from USDA Rural Development’s Section 504 program page (last modified Oct. 29, 2026) and USDA’s May 2025 Section 504 fact sheet, both checked Nov. 10, 2026. Monthly payment estimates are our own calculation at 1% over 240 months.
USDA Section 504 FAQ
Sources: USDA Rural Development, Single Family Housing Repair Loans and Grants; USDA Rural Development, Section 504 Home Repair Fact Sheet (May 2025).
