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Grants and Loans for Household Septic Systems

USDA Rural Development Section 504 Housing Repair & Rehabilitation Loans & Grants

What does this program do? 
Also known as the Section 504 Home Repair program, this provides loans to very-low-income homeowners to repair, improve or modernize their homes or grants to elderly very-low-income homeowners to remove health and safety hazards.

Who may apply for this program?
To qualify, you must:

  • Be the homeowner and occupy the house
  • Be unable to obtain affordable credit elsewhere
  • Have a  family income below 50 percent of the area median income
  • For grants, be age 62 or older and not be able to repay a repair loan

What is an eligible area?
Applicants may  check the address of their home to determine eligibility.

How may funds be used?
Loans may be used to repair, improve or modernize homes or remove health and safety hazards. Grants must be used to remove health and safety hazards.

How much money can I get?
Maximum loan is $20,000
Maximum grant is $7,500
Loans and grants can be combined for up to $27,500 in assistance
Note: Rural homeowners may be eligible for higher loan or grant amounts under the Single Family Housing Section 504 Repair Pilot Program. 

What are the terms of the loan or grant?

Loans can be repaid over 20 years
Loan interest rate is fixed at 1%
Full title service is required for loans of $7,500 or more
Grants have a lifetime limit of $7,500
Grants must be repaid if the property is sold in less than 3 years
If applicants can repay part, but not all of the costs, applicants may be offered a loan and grant combination

Who can answer questions and how do I get started?
Contact your local USDA Home Loan Specialist for more information and/or to apply:

Jennifer Gooler
Loan Specialist
(707) 526-6797
(844) 206-7011 fax

USDA Santa Rosa Service Center - Rural Development
777 Sonoma Ave., E St Annex
Santa Rosa, CA 95401-4731
(707) 526-6797

USDA Section 502 Single Family Housing Direct Loan Program

What does this program do? 
Also known as the Section 502 Direct Loan Program, this program assists low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.

Who may apply for this program?
A number of factors are considered when determining an applicant’s eligibility for Single Family Direct Home Loans. At a minimum, applicants interested in obtaining a direct loan must have an adjusted income that is at or below the applicable low-income limit for the area where they wish to buy a house and they must demonstrate a willingness and ability to repay debt.

Applicants must:

  • Be without decent, safe and sanitary housing
  • Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet
  • Agree to occupy the property as your primary residence
  • Have the legal capacity to incur a loan obligation
  • Meet citizenship or eligible noncitizen requirements
  • Not be suspended or debarred from participation in federal programs

Properties financed with direct loan funds must:

  • Generally be 2,000 square feet or less
  • Not have market value in excess of the applicable area loan limit
  • Not have in-ground swimming pools
  • Not be designed for income producing activities

Borrowers are required to repay all or a portion of the payment subsidy received over the life of the loan when the title to the property transfers or the borrower is no longer living in the dwelling.

Applicants must meet  income eligibility for a direct loan.  Please select your state from the dropdown menu above.

How may funds be used?
Loan funds may be used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. Funds can also be used to refinance eligible loans and for repairs and rehabilitation of existing dwellings. 

How much may I borrow?

Using the  Single Family Housing Direct Self- Assessment tool, potential applicants may enter information online to determine if the Section 502 Direct Loan Program is a good fit for them prior to applying.  The tool will provide a preliminary review after a potential applicant enters information on their general household composition, monthly income, monthly debts, property location, estimated property taxes, and estimated hazard insurance.  Potential applicants are welcome to submit a complete application for an official determination by USDA Rural Development (RD) regardless of the self-assessment results.  Upon receipt of a complete application, RD will determine the applicant’s eligibility using verified information and the applicant’s maximum loan amount based on their repayment ability and the  area loan limit for the county in which the property is located. 

What is the interest rate and payback period?

  • Effective July 1, 2021, the current interest rate for Single Family Housing Direct home loans is 2.50% for low-income and very low-income borrowers.
  • Fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower
  • Interest rate when modified by payment assistance, can be as low as 1%
  • Up to 33 year payback period - 38 year payback period for very low income applicants who can’t afford the 33 year loan term

How much down payment is required?
No down payment is typically required. Applicants with assets higher than the asset limits may be required to use a portion of those assets.

Who can answer questions and how do I get started?
Contact your local USDA Home Loan Specialist for more information and/or to apply:

Jennifer Gooler
Loan Specialist
(707) 526-6797
(844) 206-7011 fax

USDA Santa Rosa Service Center - Rural Development
777 Sonoma Ave., E St Annex
Santa Rosa, CA 95401-4731
(707) 526-6797

USDA Title 1 Property Improvement Loan

About Title 1 Property Improvement Loans
The United States Department of Housing and Urban Development (HUD) insures private lenders against loss on property improvement loans they make. The applicant must have the ability to repay the loan in regular monthly payments. Both large and small improvements can be financed. HUD does not lend money for property improvements.

Property Improvement loans may be used to finance alterations, repairs and improvements for

  • a home, including a manufactured home, which has been occupied at least 90 days
  • a nonresidential purpose
  • or to finance the construction of a new exclusively non­residential, and structure. 

Improvements must substantially protect or improve the basic livability or utility of the property.  These loans may be used in conjunction with a  203(k) Rehabilitation Mortgage. For additional information on that program, call (800) 767-7468 and request item number 2571.

A property owner may apply at any lender (bank, mortgage company, savings and loan association, credit union) that is approved to make Title I loans. Beware of deceptive home improvement contractors.

Who To Contact: HUD's Homeownership Centers do not process Title I loans. For more information, please call (800) 767-7468 and request item number 2651, "Fixing Up your Home and How to Finance It."

Loan Amounts and Term Limits: A Title I Property Improvement loan amount is limited to the lesser of the actual cost of the improvement project, plus any applicable fees that are permitted under section 24 CFR 201.25(b). The loan amounts and term limits can be viewed at:

Interest Rate: The interest rate is a fixed rate that is generally based on the most common market rate in the area. It is negotiable between the lender and the borrower, and may vary between lenders.

Loan Security: Any loan over $7,500 must be secured by a mortgage or deed of trust on the property.

Loan Prepayment: There is no prepayment penalty.

Minimum Age of New Residential Structures: Structure must have been completed and occupied for 90 days.

USDA Section 203(k) Federal Housing Authority HUD Loan

Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home. 

Section 203(k) fills a unique and important need for homebuyers. When buying or refinancing a house that needs repair or modernization, homebuyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the property may offer adequate security.

For less extensive repairs/improvements, see Limited 203(k). For housing rehabilitation activities that do not also require buying or refinancing the property, borrowers may also consider HUD's Title I Property Improvement Loan program.

Type of Assistance:
Section 203(k) insures mortgages covering the purchase or refinancing and rehabilitation of a home that is at least a year old. A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit for the area. The value of the property is determined by either (1) the value of the property before rehabilitation plus the cost of rehabilitation, or (2) 110 percent of the appraised value of the property after rehabilitation, whichever is less.

Many of the rules and restrictions that make FHA's basic single family mortgage insurance product (Section 203(b)) relatively convenient for lower income borrowers apply here. But lenders may charge some additional fees, such as a supplemental origination fee, fees to cover the preparation of architectural documents and review of the rehabilitation plan, and a higher appraisal fee.

Eligible Activities:
The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. Section 203(k) insured loans can finance the rehabilitation of the residential portion of a property that also has non-residential uses; they can also cover the conversion of a property of any size to a one- to four- unit structure. The types of improvements that borrowers may make using Section 203(k) financing include: 

  • structural alterations and reconstruction 
  • modernization and improvements to the home's function
  • elimination of health and safety hazards
  • changes that improve appearance and eliminate obsolescence
  • reconditioning or replacing plumbing; installing a well and/or septic system
  • adding or replacing roofing, gutters, and downspouts
  • adding or replacing floors and/or floor treatments
  • major landscape work and site improvements
  • enhancing accessibility for a disabled person
  • making energy conservation improvements

HUD requires that properties financed under this program meet certain basic energy efficiency and structural standards.

Applications must be submitted through an FHA approved lender.

Technical Guidance:
Insurance for rehabilitation is authorized under Section 203(k) of the National Housing Act (12 U.S.C. 1709(4k)). Program regulations are at 24 CFR 203.50. For more information contact the FHA Resource Center.

Sonoma County Housing Rehabilitation Loan Program

The Sonoma County Community Development Commission administers a Housing Rehabilitation Loan Program to provide financial assistance for owner-occupants in need of repairs on their single-family homes or mobile homes, and owners of rental properties where at least half of the tenants are low-income households. The program provides low-interest loans to eligible property owners throughout the unincorporated areas of Sonoma County and in the city limits of Cloverdale, Cotati, Healdsburg, Rohnert Park, Sebastopol, Sonoma, and Windsor.

Loan Terms: The maximum loan amount is typically $24,000 for a mobile home or $50,000 for a single-family home. Eligible property types are owner-occupied mobile homes and single-family homes. The current interest rate is 3%. The loan term is 20 or 30 years, depending on the funding source. You may qualify for a deferred-payment loan which requires no monthly payments if you demonstrate that monthly payments would be a hardship. Otherwise, the loan is amortized and you would make monthly payments. Application approval is subject to funding availability. 

Eligible Income Guidelines: HUD determines the income guidelines. They change slightly every year. The amount varies with the household size. Effective for the dates July 1, 2020, to June 30, 2021, the income limits are as follows:

Household Size  Income Limit 
7 $112,750

Eligible Uses: Examples of the types of projects that may be eligible for Housing Rehabilitation loans include:

  • Leaking roofs
  • Furnaces
  • Wiring
  • Plumbing
  • Windows
  • Doors
  • Health and Safety corrections as allowed under the program guidelines

How to Apply: Complete the online application and submission requirements found here:

For Additional Information: If you have any questions about the program or the application process and requirements, contact Shelley Ticehurst at (707) 565-7553 or, or call the Community Development Department's Main Office at (707) 565-7500.

Sonoma County Septic System Grant and Loan Program

The County is preparing to submit an application to the Clean Water State Revolving Fund for the purpose of offering grants and below market rate loans to homeowners for the repair, upgrade or replacement of their septic system as required. The specific details and framework for that program are under development and will be shared here once available. 

Russian River Clean

Contact Information

Russian River Clean

Alisha O'Loughlin

Lower Russian River Ombudsperson

County Administrator's Office
County of Sonoma

Contact us by Email

Contact us by Phone


County Administration Building
575 Administration Drive
Suite 104A
Santa Rosa, 95403