When it comes to costly home improvements, who wouldn't want to use somebody else's money? For a select few who fit stringent criteria, there are indeed government grants to fund some home improvements. But, for the vast majority, grabbing for government cash will likely end in being duped by a scam.

"Billions of dollars go out our doors to cities and larger urban counties and to states to do all kinds of things, and among those things people can use that money for is for rehab activities," says Brian Sullivan, a spokesman for the U.S. Department of Housing and Urban Development (HUD). Some of this money is in the form of loans, but some goes out as grants, Sullivan says.

Of course, there's a catch: Most of the money is designated for low-income families. By definition, Sullivan says, the recipient cannot earn more than 80 percent of the area's median income. If you meet those qualifications, the best way to find such sources of money is to contact your local public housing agency or city hall and ask whether there are any federal, state or locally funded programs for rehabilitation.

Who really qualifies
You may be able to get your hands on funds if you're in a community that's been designated for revitalization, for instance. Among the types of funding distributed by HUD are block-grant funds, which go to communities to promote development. Local officials and nonprofit organizations award these grants through programs designed to improve neighborhoods. The Bush administration's propsed 2008 budget includes some $3 billion for the Community Development Block Grant Program (CDBG) adminstered by state and local governments. Your local housing agency should be able to tell you about such programs or you can check HUD's Web site for a list of programs organized by state.

HUD is not the only government agency that offers money for home improvements. The U.S. Department of Agriculture Rural Development offers grants of up to $7,500 to low-income individuals over age 62 who live in areas defined as rural by the federal government. "Generally, small towns of about 10,000 or less," says Jay Fletcher, public affairs specialist for USDA Rural Development.

In this instance, the money cannot be used for luxuries, such as adding a deck or upgrading the kitchen, but rather must be designated for repairs that are necessary for the safety or health of the homeowner, like renovations to accommodate a wheelchair, or upgrades to the home's electrical wiring necessary for safety.

Apply through a housing office, because the money is disbursed through local governments rather than the USDA. When someone applies for these grants, a home inspection is ordered, Fletcher says. "An applicant will go to his or her local county office of rural development and talk to a counselor, who will then send an adviser to the home to inspect it," he says. It is this inspector who determines whether the repairs are needed for health or safety.