My wife bought our current home on a USDA Rural Dev loan in about 1998. It was helpful to her then, and has been not such a bad deal really. We haven't paid the reduced payments for about 3 years, Currently our home is assessed at $100K and we owe around $65K. Se are having a new baby (Surprise!) and my wife is going to be taking a year off of work to finish grad school and be a stay at home mom, so losing that income will put us in a position where we will have to use the reduced payment program... However, due to the new baby, we need to add on. My wife thinks that she remembers restrictions on adding on or improving the home. Is this true, and what are the restrictions? Also does USDA Rural Dev offer home equity type loans?