Presented by: Jeanie Barbrow USDA Rural Development 504 Repair Loans and Grants SFH Program
504 Home Repair Program: This program provides loans to very low income homeowners to repair, improve, or modernize their homes or provide grants to elderly very low income homeowners to remove health and safety hazards or make it more accessible to a household member with a disability.
What is the 504 Loan and Grant Program? • Provides home repair loans to very-low income applicants • Provide home repair grants to very-low income seniors who do not meet loan requirements • Loans may be used to repair, improve, or modernize homes or to remove health and safety hazards • Grants must be used to remove health and safety hazards
504 Repair Loans and Grants To Qualify: Be a homeowner and occupy the home Be unable to obtain affordable credit elsewhere Have a household income below 50% of the area median income (Income will be adjusted using deductions) GRANT: Be 62 or older and not able to repay a repair loan
504 Repair Loans and Grants To Qualify: Non-retirement assets in excess of $15,000.00 (or $20,000.00 for an elderly household) must be used to reduce the Section 504 request.
504 Repair Loans and Grants To Qualify: For the Section 504 Loan, the applicant must have a reliable income source sufficient to allow repayment of the loan as supported by a budget, which is defined as using a maximum Total Debt (TD) ratio of 46%.
Exhibit 12-1 Program Type Eligibility Adjusted Household Income Age TD Ratio Eligible Amount Up to 30% AMI 62 or n/a Grant up to $10,000 Limit Greater than 30% AMI 62 or Exceeds 46% Grant up to $10,000 Limit Loan/Grant Combination for equal amounts Greater than 30% AMI 62 or < 46% (minimum$1,000 loan; maximum $10,000 older grant) Any very-low income AMI Any Less than 46% Maximum $40,000 Loan
Loans and Grants can be combined to total up to $50,000 of assistance .
Restrictions of the use of 504 Funds: Cannot be used for: Assist in construction of a new dwelling Make repairs to a dwelling in such poor condition that when the repairs are Completed, the dwelling will continue to have major hazards Move a mobile home Pay off any debts Provide site preparation – grading, foundation plantings, seeding or sodding Landscape
Critical Home Repairs New windows Rural Housing Provides New counter tops Roof repairs Siding Home Rehabilitation
HOME REPAIR • Loans and Grants Program Before After
HOME REPAIR Provides loans and grants to very low- income homeowners to: • Repair, improve, or modernize their dwellings [or] • remove health and safety hazards. After
Connecting Clients to Services Office Locations State Office - Richmond Area 3 Office (Harrisonburg) 1606 Santa Rosa Road, Suite 238 1934 Deyerle Avenue, SD Richmond, VA 23229802-828-6012 Harrisonburg, VA 22801 Phone: 804-287-1592 Phone: 540-433-9126 Area 1 Office (Wytheville) Area 4 Office (Courtland) 100 USDA Drive 22329 Main Street Wytheville, VA 24381-8366 Southhampton Office Bldg 2 Phone: 276-484-9384 Courthland, VA 23737-1026 Phone: 757-346-3160 Area 2 Office (Lynchburg) 20311-A Timberlake Road Lynchburg, VA 24502-0337 Phone: 434-439-3586
What are the Loan Requirements? Rural Eligibility [STEP ONE] To see if your area meets rural eligibility visit: www.rd.usda.gov The USDA Income and Property Eligibility Site Follow These Steps:
What are the Loan Requirements? Rural Eligibility [STEP TWO] To see if your area meets rural eligibility visit: population less Than 35,000. The USDA Income and Property Eligibility Site Follow These Steps:
What are the Loan Requirements? [STEP THREE] Rural Eligibility To see if your area meets rural eligibility visit: The USDA Income and Property Eligibility Site Follow These Steps:
3 Learning Objective • How affiliates can utilize USDA 502 Loans : o Purchase Existing o Purchase lot and build o Purchase Lot with Modular Home o Purchase Lot with Manufactured Home (New or Used)
3 Learning Objective • How affiliates can utilize USDA 502 Loans : o Purchase Existing o Purchase lot and build o Purchase Lot with Modular Home o Purchase Lot with Manufactured Home (New or Used)
3 Learning Objective • How affiliates can utilize USDA 502 Loans : o Purchase Existing o Purchase lot and build o Purchase Lot with Modular Home o Purchase Lot with Manufactured Home (New or Used)
SFH Programs | Key Partners
Application Process • Place an application with RD Office or with a partner: • We will require items such as: • Bank Statements, Copy of Deed, Income Information, • Photo ID, social security number, Tax returns if you file taxes • One estimate from a Virginia Licensed Contractor for the repairs
Application Process • Application will be reviewed with 3 days – • Missing information must be provided within 15 days or 30 days with bid • Eligibility determination will be made within 30 days of completed application.
PRIORITIES FIRST PRIORITY: Health and safety hazards such as unsafe water, failed septic system, lack of heat, and those affected by natural disasters who are ineligible for federal assistance. SECOND PRIORITY: Removal of other health and safety hazards THIRD PRIORITY: Subsequent applications to an existing borrower. FOURTH PRIORITY: All other requests that do not meet the above
PROPERTY REQUIREMENTS • Home must be modest for the area- value cannot exceed area loan limit • Manufactured homes must be on a permanent foundation or will be with 504 funds. • Repair(s) must remove all health and safety concerns • Need at least one bid for the requested repair(s)
Area Loan Limits for Virginia: Accomack $251,862 Franklin $251,862 Nelson $349,600 Albemarle $349,600 Frederick $251,862 New Kent $428,720 Alleghany $251,862 Giles $251,862 Chesapeake $200,000 Amelia $428,720 Gloucstr& York $367,080 Northamptn$251,862 Amherst $251,862 Goochlnd $428,720 Northumbld $254,840 Appmx $251,862 Grayson $251,862 Nottoway $251,862 Augusta $251,900 Green $349,600 Orange $251,862 Bath $251,862 Greensvll $251,862 Page $251,862 Bedfordd $251,862 Halifax $251,862 Patrick $251,862 Bland $251,862 Hanover $428,720 Pittsylvania $251,862 Botetrt $251,862 Henrico $428,720 Powhatan $428,720 Brunswick $251,862 Henry $251,862 Prince Edwd$251,862 Buchanan $251,862 Highland $251,862 Prince Grg $428,720 Buckhm $349,600 Isle of Wgt $367,080 Prince Wm $581,220 Campbell $251,862 James City $367,080 Pulaski $251,862 Caroline $428,720 King/Queen $251,862 Rappahan $581,220 Chrs City $428,720 King George $280,600 Richmond $251,862 Charlotte $251,862 King Wimn $428,720 Roanoke $251,862 Chesterfield $428,720 Lancaster $354,200 Rockbridge $251,862 Clarke $581,220 Lee $251,862 Rockingham$251,900 Craig $251,862 Loudon $581,220 Russell & Wise $251,862 Culpeper $581,220 Louisa $251,862 Scott & Washington $251,862 Cumbrlnd $251,862 Lunenbg $251,862 Shenandoah$251,862 Dickenson $251,862 Madison $251,862 Smyth & Tazewell & Wythe $251,862 Dinwiddie $428,720 Mathews $367,080 Southhmpt $251,862 Essex $251,862 Mecklbrg $251,862 Spotsylvania$581,220 Fauquier $581,220 Middlesex $251,862 Stafford & Warren $581,220 Floyd $251,862 Montgmy $251,862 Surry & Westmoreland $251,862 Fluvna $349,600 Suffolk $200,000 Sussex $428,720
What are the Loan Requirements? • Income: cannot exceed very low income guidelines; visit website for details. • Credit History: must demonstrate ability and willingness to repay – 620 streamline • Property must not exceed our area loan limit and be located in an eligible area- modest for the area • Total Debt Ratio does not exceed 46%
Terms of Loan : Loans terms are 20 years Fixed interest rate of 1% Full Title Service is required for loans exceeding $25,000.00 Deed of Trust if loan exceeds $7,500
What are the Loan Requirements? Loan Terms Low Estimated Monthly Repayment Schedule Loan Amount $20,000 $15,000 $10,000 $5,000 20 years $92 $69 $46 $23
What are the Grant Requirements? • Income: cannot exceed very low income guidelines; visit website for details. • At least one applicant must be 62 or older • Credit History is not considered • Property must not exceed our area loan limit and be located in an eligible area • Income is below 30% AMI or Total Debt Ratio exceeds 46%
GRANT AGREEMENT: Before grant funds are disbursed: Grant Agreement must be signed: If the home is sold within 3 years of today; the full amount of grant will be repaid. 29
Questions?
Jeanie Barbrow Single Family Housing Program Director of Virginia USDA Rural Development Jeanie.Barbrow@usda.gov Office: 804-287-1616 www.rd.usda.gov/va
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