Home Repair has become big business in the United States! Perhaps because people delayed repairs when tough times hit, or because aging Boomers have neglected homes they’ve lived in for decades. Whatever the reason, home repairs have become a critical issue for many.
In fact the home repair market has attracted big players like Amazon and Google. Both companies are experimenting with services to help you find items you need for repair, to install those items or to do the necessary repairs for you. At a price of course. That’s great if you’ve got money to pay for it … but what if you don’t?
Then you — like so many others — are in a tough position. Leaking roofs, failing foundations and other hazards are threatening health and safety in too many homes. Fortunately there has been some response on the part of federal, state and local governments as well as private organizations and non-profits.
If you need to figure out how to pay for repairs be prepared to do some searching. You may not be able to fix your roof but you can do some detective work on the internet. Here are your best options:
Discover your program today!
Update May 2018 Are you trying to figure out how to pay for the home repairs and improvements you want — or need — to make? A recent report from the Wall Street Journal talks about a new “photo contractor service” which could help. It doesn’t directly help with financing but it could make it more possible for you to get an accurate estimate for the job you need to do — and that can mean a lot! The company responsible is called “Hover” and both Google (Alphabet) and Home Depot are investors. Hover’s tool helps to provide transparency by generating a three dimensional scale model of the structure and the job to be done. So you get more precise measurements and cost estimates for the job you are considering. That should translate into higher confidence in the proposal you are considering as well as more confidence on the part of your lender if you are using a loan to help pay for the job.
Update October 2017 Did you suffer damage from flooding during Hurricane Harvey? If so and you’re looking for help paying for repairs you should immediately check your insurance coverage if you haven’t already. Lots of folks’ coverage specifically excludes flooding, and many do not purchase the flood insurance policies offered by FEMA. So a lot of people may have to rely on casualty-loss tax deductions to help with their financing. Be aware that this could be your last chance to do so. Part of the tax code simplification being considered is likely to eliminate those deductions. It’s not certain that will happen, and the extent of this hurricane’s damage may cause lawmakers to reconsider. In any event be aware of your options and take action as soon as you can to get help.
As the U.S. population ages there are more and more elderly “aging at home,” determined to avoid moving into a nursing home —- or unable to afford one. According to the U,S. Census in 2013 there were 12.2 million households that were headed by a person 75 years old or more — an increase of 13% from ten years ago. Many have health problems and are unable to drive to get medical care, food and other supplies. To make matters worse their houses - where they desperately want to remain - are aging as well. Minor to major repairs are needed to make them safe to remain in, but fixed incomes are getting tougher and tougher to live on. Many churches have started ministries to assist with small repairs, and state governments are beginning to take notice and devote funds to helping out. For example New York’s latest budget includes $65 million for services for the elderly and for family caregivers.
So one place to start looking for assistance is on your own state's website. If you find a special allotment for home repairs for low income or seniors you may also be able to see what organizations are receiving the funds. You can then contact them to see if you qualify for aid. If your repairs aren't too major and you just need to find someone to do them you might try a service like “taskrabbit”. This is an online platform that lets you find someone to do a specific type of job or repair and then hire them to do the work. Be sure to look at reviews of specific people and don't be afraid to do some bargaining.
Urgent Repairs: If you have an urgent home repair you need help paying for - like a water heater that’s not working - here are some possible places to look:
- if you own your home you might consider a home equity loan, especially while interest rates are low;
- the Federal Housing Agency (FHA) offers 203(k) loans that allow you to refinance and include the cost of repairs in your loan — giving you a much lower interest rate than if you took out a regular loan;
- your own home insurance policy may cover your repair so be sure to check that as your first and best option;
- also check your local housing agency to see if there is a block grant that could be used to help you with your payment.
Own your home? Take advantage!
FHA 203(K) Loans: If you have heard of the FHA’s “203K Loan” you may think that it only applies to people who are purchasing a home. In fact it is also available to home owners who need money to put into repairs. If you don’t need more than $35,000 for your repairs this could be the loan for you.
An FHA 203(K) Refinance Loan will allow you to include up to $35,000 in cash into a refinance loan to do many different qualifying repairs or improvements. Fix a leaky roof, get new kitchen appliances, remodel your bathroom, put in new doors and windows, and much more. You don’t have to have an existing FHA loan to qualify for this loan. And your new mortgage can even be greater than what you paid for the home or your home’s current appraised value. You must work through a FHA-approved lender. Contact your bank (or another one that you like) to see if they are FHA-approved, or simply do an internet search or go to the HUD.gov website to find one in your area.
Help for Veterans: Are you a veteran? If so you may be able to get some special help to make repairs and improvements to your home. If you have disabilities related to your military service and need to make changes to accommodate your injuries and make your home livable you can get a grant of up to $50,000. Contact your VA office and also see our review of grants for veterans.
Help for Seniors Seniors: are you familiar with the “eldercare locator?” This is a tool that is managed by the U.S. Administration on Aging, which is part of the Department of Health and Human Services. It can help you find services and various types of care for senior citizens. One of the topics it covers is Home Repair and Modification — including the ability to find help in your local area. You can search “eldercare locator” and then choose the category “Home Repair & Modification.” If you have questions that aren’t getting answered you can also do an online chat with someone who should have the information you need. One note: when we tried to test the “search by location” function we were unable to enter our zip code or city to see examples of local services. We hope and trust this is just a temporary glitch and we’ll update this section when we are successful.
Reverse Mortgage: Reverse Mortgages are available to those over 62 years of age who have considerable equity in their home. This is an intriguing instrument because it is a mortgage that pays you, rather then you paying the bank. Basically you are borrowing against the equity that you have built up over the years. You can choose to receive an initial lump sum, or you can receive payments monthly. You do not make any payments to your bank, but the amount owed on the house goes up each month. It does not have to be paid off until you move out of the house. Often these loans get paid off when your heirs sell the house after you die.
You may see quite a bit of advertising for this type of mortgage if you are in the target audience. That is because they are typically more expensive than a traditional mortgage, and the bank and brokers make more money on them. There are some serious pitfalls that you must be aware of in order to even consider a reversrse mortgage to be sure you are fully informed. Don’t even consider one before reading our concise, thorough review of reverse mortgages!
If the situation is right, the reverse mortgage can be a great way to go. You get some of your money back out of the house and you can use it to make necessary repairs and to help with your monthly cash flow.
Nursing Home Diversion Programs: There are a number of programs available that are designed to help qualifying people make repairs and improvements rather than having to move into a nursing home. If you have an income that makes you eligible for Medicaid you may be able to get a special waiver for financial assistance in order to keep you in your home. Every state is different with regard to its requirements and the benefits that it offers, but it’s definitely worth checking with you state’s Medicaid Office to see if you are eligible for some financial help.
Other “Diversion Programs”: Even if you don’t qualify for Medicaid many state and local agencies offer similar assistance in order to keep you in your home. Sometimes they are grants, sometimes they are subsidized or deferred payment loans. These are designed for income levels classified as low to moderate and are intended for the elderly and disabled. The best way to find out if there is such a program in your area — and to get other advice as well — is your local Area Aging Agency. These agencies receive block grants from HUD and sometimes they use the funds to provide home repair services or on a sliding scale based on your income. Do an internet search for such an agency in your county or you can call 1-800-677-1116 for a referral.
Local Housing Agencies: Regardless of your age or situation you should definitely check with your local housing agency to see what advice or services that can provide. In some areas these agencies use their funds to provide homeowners with low incomes grants (that is, money you never have to pay back…) for emergency repairs. In Sacramento CA the local agency will provide $5000 for repairs that are urgently needed for safety.
Being well informed is more than half the battle in terms of finding the funds necessary to do repairs you need to do – and/or improvements that would increase the value of your home. Check out the resources we’ve reviewed here and also take a look at the information in our article about grants for home repair.
Finding Trusted Home Improvement Contractors: Earlier this year Amazon announced its new “Home Services” offering. In many cities you can now turn to Amazon when you need to find a trusted contractor to provide various services for you. The task might be something as simple as assembling something you bought, or it could have to do with getting some home improvements accomplished. Just click on the category of interest and see local contractors that could do the job. More importantly, see how others have rated that contractor before you jump in and hire someone. It’s not available everywhere but it’s worth checking out to save time (and maybe money) finding a tcontractor others speak highly of..