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USDA Rural Development, Housing & Community Facilities Programs



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The Housing and Community Facilities Programs provide a number of homeownership opportunities to rural Americans, as well as programs for home renovation and repair.  HCFP also makes financing available to elderly, disabled, or low-income rural residents of multi-unit housing buildings to ensure they are able to make rent payments. (USDA website). 

The information on this page has been taken from  Please refer to it for additional information about the following programs.  

Direct Loan Program

  • Individuals or families receive assistance in the form of a home loan with an affordable interest rate. 

  • Also referred to as Section 502 Direct Loans

  • Most of the loans are to families with an income level below 80% of the community median income level.

    • Low Income = 50 to 80 percent of the median income

    • Very Low Income = below 50% of the median income

  • Loans may be made for either the purchase of an existing home or for new home construction

  • Families must be without adequate housing, but be able to afford mortgage payments, including tax and insurance

  • Applicants must be unable to obtain credit elsewhere, but have a reasonable credit history

  • Loans are for up to 33 years, 30 for manufactured homes.

  • Housing must be modest in size, design and cost.  It must not have a market value in excess of the applicable area loan limit, and cannot have certain prohibited features

Loan Guarantee Program

  • Under this program, the Housing & Community Facilities Programs guarantees loans made by private sector lenders.

    • The individual still works with the private lender and makes payments to that lender

    • A loan guarantee through HCFP means that should the individual borrower default on the loan, the HCFP will pay the private financier for the loan.

  • Individuals or families may borrow up to 100% of the appraised value of the home, eliminating the need for a down payment. 

  • Families must be without adequate housing, but be able to afford mortgage payments, including tax and insurance

  • Applicants must have a reasonable credit history

  • Applicants may have an income of up to 115% of the median income for the area.

  • Loans are for thirty years, with the promissory note interest rate set by the lender

  • Approved lenders under the Single Family Housing Guaranteed Loan Program include:

    • Any state housing agency

    • Any Farm Credit System institution with direct lending authority

    • Any lender participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan programs

    • Lenders approved by the US Veterans Administration as a qualified mortgagee

    • Lenders approved by Fannie Mae for participation in family mortgage loans

    • Lenders approved by Freddie Mac for participation in family mortgage loans

    • Lenders approved by HUD for submission of applications for Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities

  • Housing must be modest in size, design and cost.

Mutual Self-Help Housing Program

  • Used primarily to help low and very low income households construct their own homes.

    • Low Income = 50 to 80 percent of the median income

    • Very Low Income = below 50% of the median income

  • Targeted to families who are unable to buy clean, safe housing through conventional methods

  • Enables future homeowners to work on homes themselves in order to increase affordability

    • Each qualified applicant is required to complete 65% of the work to build their own home

  • Once accepted into the Self-Help Housing Program, enrollees generally apply for a Single Family Housing Direct Loan

  • Technical Assistance Grants and Site Loans are provided to nonprofit and local government organizations, which supervise groups of five to twelve enrollees in the Self Help Program. 

    • Members of each group help work on each other's homes, moving in only when all the homes are completed.

  • Applicants must be unable to obtain credit elsewhere, yet have reasonable credit histories.

  • Families with very low incomes living in substandard housing are given first priority.

  • Loans are for up to 33 years

  • Homes must be modest in size, design and cost.  Modest housing is defined as housing costing less than the HUD dollar cap.

Home Repair &  Preservation

  • This program provides funds for very low income families who own homes in need of repair.  Funds are also provided to make a home accessible to someone with disabilities.

    • Funds are available for repairs to improve/modernize a home or to remove health/safety hazards

  • To obtain a loan, homeowners must be unable to afford credit elsewhere, and must have very low incomes. 

    • Very Low Income = below 50% of the median income

  • Grants are only available to homeowners who are 62 years of age or older, and cannot repay a Section 504 loan.

  • Loans are for up to 20 years at one percent interest

  • Loans up to $20,000 and grants of up to $7,500 are available

    • Real estate mortgage and full title services are required for loan of $7,500 or more.

    • Grant funds may only be used to pay for repairs and improvements for health/safety hazard removal.

    • A grant/loan combination is made if the applicant can repay part of the cost.

    • Grants and loans can be combined for up to $27,500 in assistance.

Homes for Sale

  • Please visit to see for sale real estate that is either government owned or is a potential foreclosure sale.  Single family housing, multi-family housing, business & cooperative programs and farm loan program real estate information is available by county.

Rental Assistance Program

  • Rent subsidies ensure that elderly, disabled and low-income residents of multi-family housing complexes (financed by HCFP) are able to afford rent payments.

    • Qualified applicants pay no more than 30% of their income toward housing

  • To determine eligibility or to apply for any of the programs listed above, please contact your Rural Development State Office

Farm Labor Housing Program

  • Nationwide program designed to provide housing to farm laborers

  • Loan funds are used to buy, build, improve or repair housing for farm laborers, including: purchasing a site, leasehold interest in a site, construct daycare facilities, housing or community rooms, to pay fees for purchasing durable household furnishings and to pay construction loan interest.

  • This program is the only exception to the Housing & Community Facilities Programs rural service area.  Funds may be used in urban areas for nearby farm labor.

  • Loans are made to farmers, associations of farmers, family farm corporations, Indian tribes, nonprofit organizations, public agencies and associations of farm workers. 

  • Grants are made to farm worker associations, nonprofit organizations, Indian tribes and public agencies.  Grants may cover ups to ninety percent of development costs.

  • Typically, loan applicants are unable to obtain credit elsewhere.  In some instances, farmers able to get credit elsewhere may obtain loans at a rate of interest based on the cost of federal borrowing.

Rural Rental Housing Guaranteed Loan Program

  • Intended to fund construction, acquisition or rehabilitation of rural multi-family housing for low-income residents.

  • Occupants of the completed housing facility must be very low to moderate income households; or elderly, disabled or handicapped people with income not in excess of 115% of the median income of the surrounding area.

  • Terms of the loans guaranteed may be up to forty years, and the loans must be fully amortized.  Rates guaranteed must be fixed, as negotiated between lender and borrower, within the HCFP maximum.  

  • Maximum rent is thirty percent of 115% of median income, and average rent of all units is thirty percent of the median income adjusted for family size.

  • Program is limited to rural areas.  Communities are generally eligible if they have populations of not more than 10,000 nor more than 20,000 if there is a serious lack of mortgage credit.

Rural Rental Housing Program

  • Direct, competitive mortgage loans made to provide affordable multifamily rental housing for very low, low and moderate-income families, the elderly and persons with disabilities.  

  • Primarily a direct to mortgage program.  Funds may also be used to buy and improve land and to provide necessary facilities such as water and waste disposal systems.

  • In new projects relating to this program, 95% of tenants must have very low incomes.  In existing projects, 75% of new tenants must have very low incomes.

  • Four variations to this loan program exist: Cooperative Housing, Downtown Renewal Areas, Congregate Housing & Group Homes for Persons with Disabilities and the Rural Housing Demonstration Program.

  • Loans are for up to fifty years at an effective one percent interest rate.  A current rate is used for the promissory note but thereafter is used only to determine maximum rent payments.

  • Loans can be made to individuals, trusts, associations, partnerships, limited partnerships, state or local public agencies, consumer cooperatives and profit/nonprofit corporations.  For-profit borrowers must agree to operate on a limited-profit basis.

  • Those living in substandard housing are given first priority for tenancy.  When rental assistance is used, top priority is given to very low-income households.

  • Rural Development State Directors use needs criteria to establish a list of targeted communities for which applicants may request loan funds.  The applicants are rated competitively in order to select recipients.