Goal: Increase the Availability of Affordable Homes
Role: Generate Capital

Resources Available for Rural Households

The U.S. Department of Agriculture (USDA) provides additional funding for affordable homes in rural areas through the Rural Housing Service. Roughly one-quarter of occupied homes in the US are located in rural areas, and some three in ten rural households face housing affordability challenges. Renters make up a disproportionate share of these cost-burdened households. [1]

The list below provides basic information about some of the main housing programs for rural households. Selected programs are organized into two main categories: Supply-side resources, which lower the cost of preserving, creating and operating housing units so that they are affordable to low- or moderate-income households, and demand-side subsidies that help low- or moderate-income households pay for units that they select in their local housing market.
For more information on these and other programs visit the Housing Assistance Council website.

Supply-side Resources

Multi-family programs

  • The Farm Labor Housing Loan and Grant program (Section 514/516) helps to finance the development, improvement, purchase, or repair of homes for farm workers through low-cost loans made to farmers and farmers' associations, nonprofit organizations, and public agencies. Funds can also be used to construct day care and other shared facilities or for the purchase of household furnishings. In general, program participants are unable to obtain credit from other lending institutions.
  • The  Section 515 program is primarily used to provide direct low-cost mortgages for property owners to develop rental housing that is affordable to low income rural residents. The program may also be used for land acquisition and improvements, including installation of necessary infrastructure such as waste disposal systems. In new Section 515 properties, 95 percent of tenants must have incomes under 50 percent of the area median, and in an existing property 75 percent of tenants must have incomes below this level.
  • Rural Rental Assistance (Section 521) helps to reduce the cost of renting for tenants in properties that receive financing through the Section 515 and 514/516 programs discussed above. This project-based program (the subsidy is tied to the unit, not the family) covers the difference between 30 percent of household income and the monthly rental rate.
  • The Section 538 Guaranteed Rural Rental Housing Program lowers the cost of developing new affordable rental properties with five or more units by providing a guarantee for loans made by private lenders. Tenants in Section 538 properties must have incomes at or below 115 percent of the area median when they move in to the building, and rents may not exceed 30 percent of this income threshold.

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Demand-side Resources

Single-family programs

  • In conjunction with the Rural Housing Site Loans program, Mutual Self-Help Technical Assistance Grants enable low-income families to affordably own their own home through sweat equity. Nonprofit and local government organizations oversee small groups of families engaged in building their own homes and assisting in the construction of others'. Enrollees move in when all of the homes have been completed. Program grants help to fund technical assistance and other expenses incurred by the agency administering the program.
  • The Section 502 program provides two types of programs: 30-year loans to help low-income households purchase homes in rural areas and/or build, repair, renovate, and relocate a home; as well as loan guarantees for loans made by approved lenders.
  • Very Low-Income Housing Repair Loans and Grants (Section 504) enable homeowners who are unable to obtain credit otherwise to make needed improvements or repairs to their homes to remove health and safety hazards. Homeowners who are age 62+ and unable to repay a loan may be eligible for grants of up to $7,500; low-interest loans are available in amounts up to $20,000 over a 20-year term.

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[1] Housing in Rural America [PDF] 2009. By the Housing Assistance Council. Washington, DC: Author.