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HOME REPAIR LOANS AND GRANTS
SECTION 504
HANDBOOK-1-3550 |
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The purpose of the 504 loan and grant program is to
provide loan and grant funds to be used to pay for
needed repairs and improvements to dwellings of eligible very
low income families. Grant funds must be used to remove
health and safety hazards. |
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Eligible Applicants |
- Very-low income (50% of county median income or less)
- Must be a U.S. Citizen or be legally admitted for permanent residence
- Must have a credit history that indicates a reasonable willingness to meet obligations
- Must have sufficient and dependable income for loan repayment
- Must possess legal capacity to incur the debt
- Be unable to obtain credit elsewhere and does not have personal resources available
- FOR GRANT ONLY:
- Be 62 years or older
- Lack repayment ability for a loan amortized at a 1% interest rate for 20 years for the cost of needed repairs
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Loan and Grant Uses |
- Repair loan and grants may be used to remove health and safety hazards such
as repairing roofs, heating, electrical and plumbing systems, water and waste disposal, installing screens,
windows, insulation and other steps to make the home safe.
- Home improvement loans may include similar purposes, but may also be used to modernize and bring a home up to
standards, make changes for convenience, add a room, remodeling and overall making improvements to the home.
The home must be owner-occupied.
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| Restrictions |
- The outstanding loan cannot exceed $20,000. The lifetime grant assistance may not exceed $7,500.
- Grants may not be used to make changes to the dwelling for cosmetic or convenience purposes, unless directly related
to removal of health and safety hazards.
- Loan and grant funds may not be used to construct a new dwelling, repair a home that will continue to be a major hazard, move a
mobile home, make off-site improvements or to refinance existing debts.
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| Security and Terms of Loans and Grants |
- Loans of $7,500 or more will be secured by a Deed of Trust. Loans of less than $7,500 may be secured by a Promissory Note only.
- Grant Agreements must be signed by all co-owners. Grant Agreements must be repaid in full if property is sold within 3 years from
the date of the Grant Agreement.
- Loan terms are not to exceed 20 years at 1% interest. Examples of payments are:
- $1,000 loan at 1% for 20 years - $5.00 monthly payment
- $5,000 loan at 1% for 20 years - $23.00 monthly payment
- $15,000 loan at 1% for 20 years - $69.00 monthly payment
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