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**[Self-Help Housing Loans]{.underline}**

*USDA Rural Development makes loans for self-help housing including site
development, and grants for technical assistance to help low-income
families build homes in rural areas. Rural areas include open country
and communities which are rural in character and not closely associated
with urban areas. Each person or group applying for credit must get
equal consideration without regard to race, color, creed, sex, marital
status or national origin.*

**What Is Self-Help Housing?**

Individual houses are built under supervision by a group of families who
will live in the dwellings. In short, it is a group mutually helping
each other with the guidance of a construction expert.

**Who May Borrow?**

Any small group of low-income families may qualify providing they cannot
individually afford to build modest houses by customary methods. Each
family must be able to repay a loan for the cash cost of the house.

**Where Does One Apply?**

Loan applications are accepted by USDA Rural Development on an
individual basis from each family participating in a self-help housing
program. Loan applications are filed in the USDA Rural Development
office serving the area where the housing will be located.

**How May Loan Funds Be Used?**

Loans are used to buy material and to pay for any skilled labor and
contract costs for work the families are unable to perform. If
necessary, loans may be used to buy building sites and to prepare them
for construction activity.

**How Is A Group Formed?**

Find 6 to 10 families in your area interested in self-help housing who
cannot afford to obtain a modest house by customary methods. Contact the
USDA Rural Development manager and express your desire to take part in
the self-help housing program. You will be guided through the
application process.

**What Must Self-Help Members Do?**

Members must agree:

-   To work as a group under the guidance of a construction supervisor.

-   To work the required hours necessary to complete the house.

-   To attend all preconstruction meetings.

-   To build their houses in the same community.

-   To carry out all responsibilities of home ownership after housing is
    completed.

**What Will USDA Rural Development Do?**

USDA Rural Development will:

-   Determine the eligibility of each participating family.

-   Advise the participating families of assistance from other federal
    or public organizations.

-   Conduct preconstruction meetings that will include basic
    instructions in construction, familiarization with the self-help
    approach and discussion of planning, construction and maintenance of
    a home.

-   Make loans to an eligible nonprofit organization to develop home
    sites to be sold to applicants on a nonprofit basis.

-   Make technical assistance grants to qualified organizations to pay
    for technical assistance and construction supervisor.

-   Hire a construction supervisor, if necessary.

**How Will Planning And Building Be Performed?**

-   Plans for modest but adequate housing will be selected and
    specifications developed.

-   Construction will involve as much on-site work as practicable.

-   Basic plans and construction methods will be standardized as much as
    possible.

-   Materials may be purchased on a group basis.

-   Group will decide how members will share labor, how records will be
    kept of time worked and how labor will be exchanged on a basis fair
    to all members.

-   Depending on skills of participants, group may decide to do all the
    construction, or contract for work that cannot be done easily, such
    as excavating, installation of wiring or plumbing and dry wall
    finishing.

-   Construction will start only after the loan has been closed.

-   Construction of houses will be done in stages. Each stage of
    construction will be finished, if practical, on all houses before
    starting the next stage.

-   The construction supervisor, with advice of the group's president,
    will divide the group into teams on the basis of skills,
    compatibility and availability.

-   Construction changes cannot be made without prior approval of the
    USDA Rural Development manager.

-   Families will move into the new homes only after construction of all
    houses has been completed.

**What Agreements Are Signed?**

Each family will sign a promissory note as evidence of a desire to
participate in the self-help housing program and to furnish the required
labor to complete the house.

A membership agreement, which will outline the operation of the project,
also will be signed by each family.

**Who May Receive Technical Assistance Grants?**

A public body or a public or private nonprofit corporation with the
legal, administrative and technical capacity to provide supervisory
assistance to help low income families build homes in rural areas by the
self-help method may qualify. An applicant organization must show that:

-   A need clearly exists in the area for self-help housing.

-   Personnel can be hired to successfully carry out a technical
    assistance program.

-   Funds are not available from other sources to provide these
    services.

If the applicant is a nonprofit corporation it must also have either:

-   Successful experience in the field of self-help housing or

-   A sponsoring organization with this experience or with proven
    ability in related business fields.

**How May Funds Be Used?**

Organizations may use technical assistance funds:

-   To hire the personnel to carry out a program of technical assistance
    for self-help housing.

-   To pay necessary and reasonable office and administrative expenses.

-   To make essential equipment, such as power tools, available to
    families participating in self-help housing construction.

-   To pay fees for training self-help group members in construction
    techniques or for other needed professional services.

The amount of technical assistance funds will be based on estimates of
reasonable technical assistance costs per house as determined by USDA
Rural Development. Agreements may be made for up to two years. The group
must provide USDA Rural Development with monthly financial and
construction progress reports.

Funds may not be used for:

-   Hiring personnel to perform actual construction work for families
    participating in a self-help project.

-   Buying real estate, building materials or other property for
    participating families.

**What Other Financial Aid Does USDA Rural Development Provide?**

The agency offers financial assistance for home ownership, rental
housing, building site development, farm labor housing and for repairing
homes, rural water and waste disposal systems and other community
facilities, and for developing business and industry.

U.S. Department of Agriculture

Rural Development - Rural Housing Programs

(Revised December 2007)

National Office Web Site: http://www.rurdev.usda.gov

South Dakota Web Site: http://www.rurdev.usda.gov/sd/\
South Dakota State Office Telephone Number: (605) 352-1100

South Dakota State Office Facsimile Number : (605) 352-1146

South Dakota State Office TDD Number : (605) 352-1147

E-Mail Address: tammi.schone@sd.usda.gov

*The U.S. Department of Agriculture (USDA) prohibits discrimination in
all its programs and activities on the basis of race, color, national
origin, age, disability, and where applicable, sex, marital status,
familial status, parental status, religion, sexual orientation, genetic
information, political beliefs, reprisal, or because all or part of an
individual\'s income is derived from any public assistance program. (Not
all prohibited bases apply to all programs.) Persons with disabilities
who require alternative means for communication of program information
(braille, large print, audiotape, etc.) should contact USDA's TARGET
Center at (202) 720-2600 (voice and TDD). To file a complaint of
discrimination, write to USDA, Director, Office of Civil Rights, 1400
Independence Avenue, S.W. Washington, D.C. 20250-9410, or call (800)
795-3272 (voice), or (202) 720-6382 (TDD). "USDA is an equal opportunity
provider, employer, and lender." (RHS-6)*