Loans Build or renovate USDA rehab
USDA rehab: buy a rural home that needs work, with nothing down
USDA guaranteed loans can include repairs in the purchase, sized to the home's value after the work. For current owners with very low income, USDA also has a separate repair program.
New to this loan? Start here: Renovation loans: buy and fix in one loan A 3-minute lesson
Who it fits
It fits buyers who qualify for a USDA purchase loan and find a home that needs a roof, a furnace, windows or updated systems. Rather than waiting for the seller to make repairs, you include them in your loan.
Older rural homes around Mancos, Dolores and Cortez often need system updates before a standard USDA loan can close. Purchase-and-repair keeps those homes within reach with no down payment.
How it works
- Bids. A contractor gives a fixed-price contract for the work.
- Appraisal as improved. The loan is sized to the value after repairs.
- One closing. Repair funds are held in escrow.
- Work and payment. The contractor is paid as work is completed and inspected.
Calculators and guides
Common questions
How long do I have to finish the repairs?
Typically about six months. Weather delays can extend some repair escrows.
What if I already own my home and need repairs?
USDA's Section 504 program offers very low income owners loans up to $40,000 at 1% for 20 years, and grants up to $10,000 for owners 62 and older to fix health and safety hazards. Start with us: we compare it with your other options, such as a renovation loan, and walk you through the next step. USDA fact sheet.
Can USDA finance building a new home?
Yes, through a single-close construction loan offered by a limited number of lenders, with a licensed, experienced builder.