the property exceeds $15,000 require escrow for
taxes and insurance (either by USDA or a prior
debtor).
To qualify for the Loan Program:
• Applicant must be a U.S. citizen or a resident noncitizen
admitted for permanent residence.
• Applicant’s household must be very low income.
• Applicant must have evidence of ownership.
• Property must be in a rural area or town with a
population of 20,000 or less.
• Applicant must possess legal capacity to incur the
loan obligation.
• Applicant must have an acceptable credit history.
• Applicant must have sufficient and reliable income
to repay loan amount requested.
• Applicant must own and occupy the property being
improved and property must be a single family
dwelling in a rural area and in need of repair.
• Applicant must be unable to obtain financial
assistance from other non-Rural Development or
grant sources and lack personal resources that could
be utilized to meet the applicant’s needs.
• Applicant must have an income under the “very
low” income limits defined by USDA Rural
Development.
• Applicant must have repayment ability for the
proposed loan.
• Loan applicants age 62 or older may be eligible for
grant assistance (see below).
Grant limitations are:
• The grant may not be used for cosmetic or
convenience purposes such as painting, paneling,
carpeting, improving closets, improving kitchen
cabinets, changing lighting or adding a room other
than a bathroom.
• The loan and grant may be used to make a home or
bathroom handicapped accessible.
• The loan or grant may be used to install a septic
system, install a well, or connect the home to public
water.
56 Senior Resource Directory 2020-2021
HOMEOWNERSHIP/
REHABILITATION PROGRAM
• USDA Rural Development provides loans for
homeownership and/or home rehabilitation (called
502 Direct Loan Program).
• Property financed must be located in eligible rural
areas or towns with a population of 20,000 or less.
• Applicant’s household income must be within either
the very low- or low-income limits as defined by
USDA Rural Development.
• Applicant may qualify for subsidy to reduce the
payments to a level as low as 1% interest. Subsidy
is reviewed periodically and adjusted according
to borrower’s income. Portions of the subsidy are
subject to recapture if borrower sells the property or
ceases to occupy the home.
• Homes financed through USDA Rural Development’s
Direct 502 Program must meet USDA Rural
Development program standards, be inspected
by a state registered inspector, meet USDA Rural
Development’s thermal standards, termite and pest
control standards and have adequate plumbing,
heating and cooling, electrical, water and waste
water disposal systems.
APARTMENTS FOR RENT
An alternative to homeownership is apartment living.
USDA Rural Development provides financing for
approximately 500 apartment complexes throughout
Alabama - giving rural citizens access to more than
16,000 apartment units. Apartments are available
for rent to low-income individuals, families, seniors
and those with disabilities. Rental assistance may be
available to eligible tenants.
For information on the location of USDA Rural
Development financed apartments in Alabama, contact
one of the offices listed below or a complete listing is
available at www.rurdev.usda.gov/al.
/al