SFH Direct Loan and Grant Programs
April 30, 2024
Section 502 Direct Funding Update
USDA Rural Development Single Family Housing Section 502 Direct Loan Program provides loans to low and very-low-income households to affordably purchase decent, safe housing in rural areas. The FY24 budget reduced funds for the 502 Direct Loan Program by about a third—from $1.25 billion last fiscal year to $880 million this fiscal year. This will unfortunately limit the number of purchase loans we are able to offer this year.
This program remains very important to many people across the country. Staff are working as quickly as possible to process new and existing applications; however, application processing may encounter significant delays due to the backlog and limited funding. Because of differences in state allocations and market conditions, processing timeframes will differ state-to-state.
We encourage prospective applicants to visit the USDA Single Family Housing Self-Assessment site to check all the qualification requirements to see if they may be eligible for the Direct program. Prospective applicants are also encouraged to consider the Section 502 Guaranteed Loan Program which has ample funding, and assists approved lenders in providing low- and moderate-income households the opportunity to purchase decent, safe housing in rural areas.
Section 504 Grant Funding Update
USDA Rural Development Single Family Housing Section 504 Home Repair Program provides loans and grants to very-low-income homeowners to repair, improve or modernize their homes. Grants recipients must be elderly and repairs must remove health and safety hazards. The FY24 budget reduced the Section 504 Home Repair Grant Program to $25 million (in comparison to $32 million last fiscal year) and rescinded $28 million of the unobligated balances that carried over from prior year appropriations. With the lower program level and no available carryover funds, this will unfortunately limit the number of grants we are able to offer this year.
Despite these Section 502 and Section 504 budget constraints and current challenges, RD staff are working hard every day to help people buy or repair modest homes in rural areas.
We appreciate your understanding. For updates on funding and information about our other housing programs, please go to www.rd.usda.gov. If you have any additional questions or concerns, please do not hesitate to contact your local Rural Development Office.
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