Catalog of Federal Domestic Assistance

Program Descriptions


10.433:  Rural Housing Preservation Grants

Objectives:  To assist very low- and low-income rural residents individual homeowners, rental property owners (single/multi-unit) or by providing the consumer cooperative housing projects (co-ops) the necessary assistance to repair or rehabilitate their dwellings. These objectives will be accomplished through the establishment of repair/rehabilitation, projects run by eligible applicants. This program is intended to make use of and leverage any other available housing programs which provide resources to very low and low-income rural residents to bring their dwellings up to development standards.



Applicant Eligibility:  Must be a State or political subdivision, public nonprofit corporation, Indian tribal corporations, authorized to receive and administer housing preservation grants, private nonprofit corporation, or a consortium of such eligible entities. Applicants must provide assistance under this program to persons residing in open country and communities with a population of 10,000 that are rural in character and places with a population of up to 25,000 under certain conditions. Applicants in towns with population of 10,000 to 25,000 should check with local Rural Development office to determine if the Agency can serve them. Assistance is authorized for eligible applicants in the United States, Puerto Rico, Virgin Islands, and the territories and possessions of the United States.

Beneficiary Eligibility:  Very low and low-income rural individuals and families who are homeowners and need resources to bring their housing up to code standards, rental property owners, or co-ops.

Credentials/Documentation:  Applicants must have the financial, legal, administrative, and operational capacity to carry out the objectives of the program by having experience in rural housing rehabilitation. Costs will be determined in accordance with OMB Circular No. A-87 for State and local governments.


Preapplication Coordination:  The standard application forms as furnished by the Federal agency and required by 7 CFR parts 3015 or 3016 must be used for this program. Preapplications on SF 424.1 "Application for Federal Assistance (for non-construction)," must be submitted to Rural Development. Applicants are encouraged to consult with the Rural Development District or State office prior to submission of a Preapplication and to receive assistance in the preparation of their preapplication. An environmental impact assessment is required for this program. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.

Application Procedure:  Applicants must file a preapplication form. The standard application forms as furnished by the Agency and required by 7 CFR parts 3015 or 3016 must be used for this program. Upon notification by Form AD-622, "Notice of Preapplication Review Action," that the applicant has been tentatively selected for funding under the preapplication project selection criteria, the applicant may submit an application on SF 424.1, "Application For Federal Assistance (for non-construction)" to the Rural Development District office. This program is subject to the provisions of 7 CFR parts 3015 or 3016.

Award Procedure:  Award is made by the Rural Development State Director.

Deadlines:  Dates governing the acceptance, review, and selection of project preapplication will be published annually in the Federal Register. Applicants may also contact the Rural Development State Office for preapplication deadlines.

Range of Approval/Disapproval Time:  Notice of action taken on preapplications will be generally within 90 days of final date of acceptance of preapplication.

Appeals:  Applicants may request reconsideration on the basis of pertinent facts concerning their application within 30 days of notification of action taken on the preapplication or application.

Renewals:  Applicants may apply for an additional HPG grant when they have achieved or nearly achieved the goals established for the previous or existing grant. The grantee must file a preapplication for the current fiscal year which will be processed and compared under the project selection criteria to others submitted at that time.

Criteria for Selecting Proposals:  Projects must provide a feasible repair rehabilitation program and serve areas with a concentration of substandard housing and very low and low-income persons. In addition, the following criteria will be considered in the selection of grant recipients. Each preapplication and its accompanying statement of activities will be evaluated on: (1) The percentage of very low-income persons assisted; (2) the percentage of use of HPG funds to total cost of housing preservation; (3) the applicant's administrative capacity and experience in (i) housing rehabilitation or weatherization, (ii) assisting very low and low-income persons attain housing assistance and (iii) prior programs no outstanding audits findings; (4) the proposed program will be undertaken in non-Metropolitan Statistical Areas identified by RHS as having populations below 10,000 or in remote parts of other rural areas, (i.e., rural areas contained in Metropolitan Statistical Areas with less than 5,000 population); (5) the program will minimize the use of grant funds for administrative purposes, i.e., less than 20 percent of grant funds; (6) the program will alleviate overcrowding in rural residences inhabited by very low and low-income families; and (7) if an existing grantee has met the objectives of its current grant.

Examples of Funded Projects:  Funded projects generally provide financial assistance to very low-income persons for bringing their dwellings up to local code standards through an HPG grant combined with other Federal funding, such as HUD's community development block grants or HHS's weatherization program. Other variations funded includes using HPG funds to establish a revolving loan fund that provides homeowners a long term, interest subsidized loan; "lending homeowners the money and "forgiving" 20 percent per year until the loan becomes a grant after five years; using the grantee's own employees to perform the rehabilitation work to reduce the costs; and, in a few instances, leveraging State resources for repair loans or grants. In most cases, grantees that are currently active in home repair and rehabilitation were selected and were able to leverage their existing programs with the new HPG funds.

Range and Average of Financial Assistance:  For fiscal year 1999, about 120 grants were obligated providing assistance for 1,770 units.


  • 10.410 Very Low to Moderate Income Housing Loans;
  • 10.411 Rural Housing Site Loans;
  • 10.417 Very Low-Income Housing Repair Loans and Grants;
  • 10.420 Rural Self-Help Housing Technical Assistance;
  • 14.108 Rehabilitation Mortgage Insurance;
  • 14.121 Mortgage Insurance: Homes in Outlying Areas.


Collectively, the purpose is to provide assistance to about 5,000 homeowners for the rehabilitation of their homes. For fiscal year 1999 preapplications were funded to assist 1,770 units.



Type of Assistance:  Project Grants.

Obligations:  (Grants) FY 99 $7,168,000; FY 00 est $5,515,000; and FY 01 est $8,000,000.

Budget Account Number:  12-2070-0-1-604.

Authorization:  Housing Act of 1949, as amended, Section 533, Public Law 98-181, 42 U.S.C. 1480.

Regulations, Guidelines, and Literature:  7 CFR 1944-N, Section 1944.651 through 1944.700, RD Instruction 1944-N. Regulations are available from Rural Development State offices.


Regional or Local Office:  Contact the appropriate Rural Development State office listed in Appendix IV of the Catalog or on the internet at

Headquarters Office:  Multiple Family Housing Processing Division, Rural Housing Service, Department of Agriculture, Washington DC 20250. Phone: (202) 720-1660. Use the same number for FTS. (Home Page)

(See Appendix IV for more contact info.)


Formula and Matching Requirements:  See 7 CFR 1940-L, "Methodology and Formulas for Allocation of Loan and Grant Funds." This program has a statutory formula consisting of the following factors and weights: State's percentage of national rural population, 33 1/3 percent; State's percentage of national number of rural occupied substandard units, 33 1/3 percent; and State's percentage of national rural families with incomes below the poverty level, 33 1/3 percent. Data source for each factor is based on the latest census data available. The percentage for each factor is multiplied by the weight assigned and summed to arrive at a State factor. The State factor is multiplied by the total amount available for allocation nationally, minus the national office reserve (about 5 percent). This program has no cost-sharing arrangement or matching requirements although priorities under the project selection criteria include extent of leveraging of funds to complement the housing preservation grant.

Length and Time Phasing of Assistance:  Grants are made for a 12 to 24 month period.

Uses and Use Restrictions:  Organizations may use less than 20 percent of the Housing Preservation Grant funds for program administration purposes, such as to hire the personnel to carry out a project of housing rehabilitation to meet the needs of very low and low-income persons in rural areas; to pay necessary and reasonable office and administrative expenses; and to pay reasonable fees for training of organization personnel. Eighty percent or more of funds must be used for loans, grants or other assistance on individual homes, homeowners, rental properties or co-ops to pay any part of the cost for repair or rehabilitation of structures; funds may not be used to hire personnel to perform construction or to pay any debts, expenses or costs other than previously outlined and approved in the project application.


Reports:  Quarterly financial and project performance reports are to be made to the Rural Development office receiving the grant.

Audits:  Periodic audits should be made as part of the recipient's system of financial management and internal control to meet terms and conditions of grants and other agreements. In accordance with the provisions of 7 CFR Part 3052, "Audits of States, Local Governments, and Non-Profit Organizations," which implement OMB Circular A-133 (Revised, June 24, 1997), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that receive financial assistance of $300,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $300,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 7 CFR 3052.

Records:  Grantees shall maintain adequate records and accounts to assure that grant funds are used for authorized purposes.

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Last Updated, November, 2000             Comments or Questions?           ©Grant 2000, All Rights Reserved