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USDA programs assist homeowners make needed improvements

Minnesota’s long winter and recent spring rains can really take a toll on homes, especially older ones with aging roofs, siding or windows. Since June is National Homeownership Month, USDA is reminding area residents to explore options for home improvements and home ownership.

For those living in homes in need of essential repairs this season, USDA Rural Development has low-interest loans available to help eligible households make needed improvements.

“The key aspect of this program is affordability for the very low-income household,” said Dan Labat, Area Director for USDA Rural Development. “These loans have a one percent fixed interest rate and typically may be repaid over a term of 20 years. For example, if you need to borrow $4,000 to make some repairs or improvements, the monthly payment would be about $17.”

Examples of eligible projects include repair/replacement of storm doors, windows, siding, furnaces, water heaters or roofs. Funds can also be used for insulation, electrical, plumbing, septic and water systems, and to provide accessibility for persons with disabilities. The maximum loan is $20,000.

Grants may be available to help applicants who are 62 or older and who cannot repay a loan to remove health and safety hazards or to make the home accessible for a disabled family member, however availability of grant funds is limited. Grants have a lifetime limit of $7,500.

Homes repaired with these funds must be located in communities of less than 20,000 people or in rural areas.

To be eligible for a repair loan, the family applying must own and live in the home to be repaired, lack personal resources to pay for needed repairs, have an acceptable credit history, limited assets and have repayment ability.

To qualify for assistance, household income must fall under income limits for the county and household size. For most counties, a two-person household must have an adjusted income of $25,000 or less. Limits increase for larger household sizes.

Along with loans and grants to repair homes, USDA Rural Development has a low-interest, no-down-payment loan program to help eligible households purchase new homes.

“The dream of owning your own home is possible; even for those households with low income,” Labat said. “We offer rates and terms that allow the financing to bridge the affordability gap for households that could not otherwise buy a home. With USDA financing, the loan applicant does not have to compromise on the quality and price of the house.”

In most cases, a family of three with an adjusted annual income of up to $45,000 may qualify for a direct loan from the agency. Homes can be existing or new construction. Existing homes must be structurally sound. Also, the property cannot have any income-producing outbuildings.

Residents in Douglas, Grant, Otter Tail, Pope, Stevens, Todd, Traverse, Wadena, and Wilkin Counties are served by the USDA Rural Development office in Alexandria. The telephone number is 320-763-3191.