Home Repair Grants and Loans
If you’ve been putting off that home improvement project because of the cost, consider applying for a state or federal grant to help you offset the expenses. There are many home improvement grants sponsored by the government that offer money to homeowners for home repairs. If a homeowner qualifies, and the project meets certain requirements, a home improvement grant does not have to be paid back.
Eligibility requirements
To qualify to receive a home repair grant certain criteria will have to be met. The homeowner’s income level, the age of the homeowner, the location and type of the property and what the money will be used for are all factors.
Section 504 Home Repair Program
The Single Family Housing Repair Loans & Grants Program, also known as the Section 504 Home Repair program, provides loans to very low income homeowners to repair, improve or modernize their homes. It also provides grants to very low income elderly homeowners to remove health and safety hazards.
To apply for this program you must:
• Be the homeowner and occupy the home
• Be unable to obtain affordable credit elsewhere
• Have a family income below 50 percent of the area median income
• For grants, be age 62 or older and not be able to repay a repair loan
To see if your property is in an eligible area to receive this grant, check the Property Eligibility map.
If you are eligible, the maximum grant under this program is $7,500, and the maximum loan amount is $20,000. Loans, which can be repaid over 20 years at a fixed 1% rate, can be used to repair, improve or modernize your homes, or to remove health and safety hazards. Grants can only be used to remove health and safety hazards.
National Residential Improvement Association (NRIA)
The National Residential Improvement Association (NRIA) can also help you find grants to help pay for home repairs. You can find a variety of government sponsored home improvement programs that can help you pay for your home improvement projects. You might qualify for grants, government insured loans, tax credits or other special home improvement programs that most property owners aren’t even unaware of.
To see what types of NRIA financial aid you might qualify for you’ll have to fill out a questionnaire on their website. All services provided by NRIA are free to consumers.
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U.S. Department of Agriculture (USDA) Grants and Loans
If you are in a designated rural area, the U.S. Department of Agriculture (USDA) provides home ownership opportunities to low and moderate income rural Americans, and makes funding available up to $7,500 to individuals to finance important home improvements that are needed to make their homes “decent, safe, and sanitary.”
The USDA Rural Development Housing Program provides assistance through home repair loans and grants to remove health and safety hazards, or to make your home accessible for household members. These funds can be used to repair or replace furnaces, appliances, electrical, foundations, siding, roofing windows, plumbing, wells, septic systems and other health and safety hazards.
USDA Rural Development loans are available up to $20,000 at a one percent fixed interest rate for up to 20 years. Seniors age 62 and older, who do not have repayment ability for a loan, may be eligible for a loan and grant combination to make needed repairs and improvements. The maximum lifetime grant amount is $7,500. Program eligibility is based on household income that cannot exceed 50% of the area median income and the property must be located in a rural community.
VA Home Loans
If you are a veteran, the Housing Grant for Disabled Veterans provides grants to military service members and Veterans with certain permanent and total service connected disabilities to help purchase or construct an adapted home, or to modify an existing home to accommodate a disability. Two grant programs exist: the Specially Adapted Housing (SAH) grant and the Special Housing Adaptation (SHA) grant.
HOME Investment Partnerships Program
The U.S. Department of Housing and Urban Development (HUD) offers grants through its HOME Investment Partnerships Program for low-income people. In addition to handicap accessibility, HOME grants cover improvements that protect against weather and emergency repairs.
The HOME Investment Partnerships Program provides grants to states and localities, but does not provide HOME assistance directly to individuals. If you are interested in participating in the program you will need to contact your local or state government to learn how the program operates in your area, as participation requirements differ. To find out who administers the HOME Program in your area, visit HUD’s contact page.
Federal Housing Administration’s (FHA) 203K loan
While it’s not a grant and will have to be repaid, The Federal Housing Administration’s 203K loan is a popular loan for homeowners who want to improve a property they are buying.
The Federal Housing Administration’s 203K loan encourages low to moderate income families to purchase homes in need of repairs at a low rate. The program allows an individual to buy and renovate a home under one fixed or adjustable-rate mortgage (You can also use these loans for home improvements only, but there are better options for that).
One drawback of this type of loan is that if you are a contractor or a DIY’er and prefer to do the work yourself, you can’t. You must use licensed contractors to do all work. There are other pros and cons regarding this type of FHA loan, to learn more there is a great in-depth article on Getting an FHA 203(k) Loan at investopedia.com
For rehabilitating a home that does not also require buying or refinancing the property, borrowers may also consider HUD’s Title I Property Improvement Loan program.
Green Energy PACE Loans
If you want borrow money for clean energy projects, the Property Assessed Clean Energy (PACE) can help you finance the upgrades. Approval for PACE financing is based on the equity in your property, which will be used as collateral to secure the loan. Typically, you’ll be able borrow up to 15 percent of your property’s value. Also, you can get in touch with your local city or state energy commission, and even your local energy company and ask if they offer grants or lower your monthly costs if you add energy saving upgrades.
There are many types of loans and grants available to repair, improve, and modernize your home or to remove health and safety hazards. Photo by Foundry Co. Feature photo by Paul Brennan.
Improving Your Home to ‘Age in Place’
There are many reasons why we want to to get home improvement grants and loans, with the obvious simply being to increase our home’s value. But for many, renovating the home to make it safer and more accessible will give them a better piece of mind as family members age.
According to AARP, over 75% of people over 50 would like to stay in their current homes or communities for as long as possible, so it makes sense that as we age, adding modifications to our home can help make it easier and safer to get around.
Whether you want to make home improvements for your aging loved ones, or if you are just now considering ways to modify your home to age in place, there are many things you can do to to improve your home. For instance, making modifications to the bath and shower, e.g., installing grab bars, handrails and shower seats, adding motion activated lighting both inside and outside of your home, replacing slippery tile floors with nonslip flooring or even widening doorways, making small improvements to the every day things that we take for granted now around the house can only help to make the home safer as we get older. Bankrate.com has an informative guide on other ways to help finance aging-in-place home renovations.
This article has been modified from its original posting in January, 2020
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