Affordable Federal Home Improvement Programs

Sometimes federal programs get a bum rap because there is so much bureaucracy tied up in them. The cost to run the program and the time consumed in applying for it can exceed the benefits. There are two federal programs, though, that deserve a closer look if your home is in need of repair, or you are considering buying a home in need of repair.

Like all government programs, however, there are specific requirements.

The “Rural Housing: Housing Repair Loans and Grants” and the “Section 203k Rehabilitation Mortgage Insurance” programs are poised to assist homeowners to obtain loans or grants to repair a current home or homebuyers to obtain a mortgage to cover the cost for the purchase and repair of a home.

Rural Housing: The housing Repair Loans and Grants program helps homeowners with the repair, improvement, modernization related to their rural dwellings. Funds are loaned at 1 percent interest for up to 20 years. Grants are available for homeowners to apply only for repair and improvements for the removal safety issues.

For eligible recipients who are able to repay a portion of the expenses, a combined loan and grant package may be arranged. The requirements are that you must live in a rural area and be a legal United States citizen.


For eligible homeowners, loans may be approved to 20k. Grants are available for up to 7.5k. A current home mortgage, along with full title services, is required for loans that exceed 7.5k

If you are interested in applying for this program, you’ll need to start by submitting an online application or contact the following for more information:

* Contact the Rural Development field office in your state – find the field office.

* For information about rural development loans, visit the USDA Rural Development website

* For information on Rural Development Housing visit their website

Section 203c Rehabilitation Mortgage Insurance –

Typically, if you want to buy a home in need of repair, you’re not able to build the cost of repairs into the home loan. You have to obtain a loan to pay for the home, acquire additional financing for repairs and then finance a permanent combined mortgage to cover both. You may be charged a high-interest rate for the interim loan, along with a short amortization period.

With the Section 203 Rehab program, however, eligible participants may be approved for one loan to address the purchase and rehab of a home in need of repair. The loan considers the cost of the home in addition to the cost of projected repairs and involves a long-term loan with a fixed or adjustable rate.

Program requirements are minimal. The property must meet local zoning requirements and building standards. The home must also be a one- to four-unit dwelling, and be completed for at least one year. Cooperative units are not eligible.

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