OLD TOWN – Seated in the warmth of their living room, the O’Clair family praised the U.S. Department of Agriculture’s Rural Development staff for helping them to keep the heat on this winter.

The O’Clairs have lived in the same house since 1986, and their furnace was more than 40 years old and never had been replaced or maintained properly, Gerald O’Clair said.

Disabled and on fixed incomes, the couple couldn’t afford to replace the furnace, water heater and oil tank.

“I don’t know what we would have done without them,” Tammy O’Clair, 49, said. “We wouldn’t have a house.”

Her husband explained that they could have used a credit card to pay for the necessary replacement, but the interest rates are extremely high.

“Being able to put it on a credit card and paying it are two different things,” Gerald O’Clair said.

They tried to get help from Penquis, a local organization that has helped them purchase fuel and winterize their house, but their attempts were unsuccessful.

After calling the USDA, the couple discovered that they qualified for the Repair and Rehabilitation 504 Loan Program. The loan, which can be granted for up to $20,000, has a 1 percent interest rate and is to be repaid over 20 years.

At $5,000, that comes out to $23 a month. For a $20,000 loan, recipients would pay $92 a month in addition to escrow for taxes and insurance.

The loan can be used for a variety of heating-related expenses, including updating an inefficient heating system, purchasing a new central heating system, replacing or adding insulation, or replacing broken or drafty windows and doors.

The loan also can be used to repair or install a well or septic system, replace or repair roofing, update electrical systems, repairing the foundation, replacing siding or making homes handicapped-accessible.

Within about three weeks of contacting the Rural Development office, the O’Clairs had been approved, selected the licensed installer of their choice and had their new system installed.

“It was so nice, though, after they got put in, not to have to worry about it,” Tammy O’Clair said.

She and her husband received three estimates from contractors of their choice to remove the old furnace, hot-water heater, and oil tank and install the new ones.

“It’s also nice that they give us the choice of who we got,” Gerald O’Clair said.

T. Smith & Sons Plumbing and Heating of Greenbush completed the work in a day, and O’Clair said he was pleased that they could use a local business.

The O’Clairs weren’t worried about just the potential fire hazard of their old furnace.

Their granddaughter Alex O’Clair, 8, lives with them and has asthma. The old furnace irritated her condition and left black marks on the walls throughout the house, Tammy O’Clair said.

“You have no idea how scared I was of that old furnace,” she said.

“That furnace was a health hazard,” her husband added.

To qualify for a 504 loan, applicants need to meet eligibility requirements.

In the last five years, the Rural Development office has helped 484 people in Maine through its 504 Loan Program, resulting in more than $3 million invested to help homeowners make essential repairs.

“If they qualify, they’d be foolish not to,” Gerald O’Clair said, urging people to use the program.

For information on the loan program, call 800-352-8963, ext. 161, or e-mail elizabeth.greer@me.usda.gov and write 504 Loan in the subject line. Include name, phone number and the county you live in. There also is information at the organization’s Web site, www.rurdev.usda.gov/me.

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Do you qualify?

To qualify for the U.S. Department of Agriculture Rural Development 504 Loan Program, applicants need to meet eligibility requirements. The income limits for Penobscot, Piscataquis and Somerset counties are as follows:

. One person, $17,250.

. Two people, $19,700.

. Three people, $22,200.

. Four people, $24,650.

. Five people, $26,600.

. Six people, $28,600.

. Seven people, $30,550.