Repairs and improvements to homes are more than an aesthetic issue. Often they affect the health and safety of the home’s occupants. There can also be serious issues of accessibility, especially for seniors and for the disabled who need special accommodations just to get around.
Many situations can pose threats to a family’s health. According to the EPA Americans spend more than 85% of their time (on average) indoors and most of that is in a residence. Situations like mold and/or cold and damp conditions can cause respiratory hazards and other health issues in both adults and children. It’s especially serious for those with asthma.
Based on the feedback and inquiries we receive in our Free Grants Community, the need for home repairs and improvement in the U.S. is great — and increasing. People want and need to make improvements not just to increase the value of their home (though that is an important added benefit). In many cases the need is urgent for the health and safety of the family. Fortunately this need is recognized, and more and more programs exist in the private arena as well as at federal and state government levels.
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Some folks are aware that there are a surprising number of loans (and grants) available from the Department of Agriculture for the purchase, rent and repair or improvement of homes. These grants and loans do come with restrictions. One of the most notable is that the location of the home must be in what the government designates as a “rural” area. Though those areas are not necessarily very remote areas, that requirement can be a limitation which disqualifies people. Applicants must also meet a low income requirement. Learn more about those loans and grants in Home Improvement Grants.
The article referenced above also discusses the Department of Housing and Urban Development’s Title I Property Improvement Loan Program. Read more about these very favorable loans there or just check out these important facts about HUD's Title I loans:
- Your home does not have to be in any particular location.
- You do not have to have a lot of equity in your home. Loans under $7500 typically require only your signature.
- Title I loans may be used for improvements or repairs that make your home safer and/or easier to live in. This includes projects required to allow easier access for a disabled person.
- These loans may also be used for new appliances as long as they are built in to the house itself.
- If you do the work on your home yourself these loans can be used for the cost of your materials — but not for your labor.
- These loans do not have any impact on your home’s mortgage or deed of trust.
- These loans usually can be obtained pretty quickly.
HUD also offers a service called the 203(K) Rehabilitation Mortgage Insurance Program. This program’s purpose is to enable the “restoration and preservation” of existing single family houses in the U.S. It allows you to either refinance an existing mortgage and add the rehabilitation/repair costs to your mortgage balance. Or if you are buying a home that needs fixing up you can add the projected costs to the amount of the mortgage being financed.
Some assistance for improvements and repairs that affect the health of home occupants is available from the Centers For Disease Control (CDC). Their website references “home improvement loans and grant interventions” which are provided to help ensure the health and safety of low income families in need of home rehabilitation. It appears that these programs are carried out by individual states. Examples given include Maryland’s EmPOWER Low Income Energy Efficiency Program that helps low income families make improvements to increase efficiency and improve air quality. And Minnesota has a Rehabilitation Loan/Emergency and Accessibility Loan Program to help low income families make repairs and improvements to assure the family’s safety and the home’s accessibility and energy efficiency. So if you are looking for help for some serious repair and improvement needs it is always a good idea to check first with your state to see what programs are available where you live. If your state has a Department of Health and Human Services that is a good place to start. For example, the Michigan DHHS provides assistance for repairs necessary to fix conditions that make the home unsafe. “Repairs” are fairly broadly defined and can mean replacing a furnace or septic system or other appliances causing a hazard. Available programs and eligibility requirements will vary from state to state and in some cases by city.
You can also find information about what your state offers by going to USA.gov and entering the search term “home repairs.” Note in particular the list which will come up showing Home Repairs information by state. And find out more about this website in our review of USA.gov.
Update June 2019
If you’re in need of some important home repairs but you’ve had bad experiences with banks, this may be a good time to reconsider your feelings and give banks a chance. Many have changed their ways and are much easier to deal with than you might imagine. Plus they are eager to get more small loans and home repair loan business in particular. NerdWallet recently recommended two institutions in particular for small home improvements and repairs. They include Wells Fargo, with loans ranging from $3000 to $100,000 with a loan term of one to five years. They say time to funding is usually just one day. NerdWallet also recommends Marcus, from Goldman Sachs. They got NerdWallet’s highest rating with loans of $3,500 to $40,000 and a loan term of three to six years. You can expect funding within two days typically.
Banks of course are in the business of making loans to credit-worthy applicants. A Home Equity Line of Credit can be a great option for you if you do have some equity in your home. The line of credit is an amount that is available to you as you need it and you are only charged interest on the amount you use rather than on the full amount that is authorized.
Projects that qualify as being for “home improvement” include things like replacing flooring, improving energy efficiency with new windows, replacing or upgrading your insulation or even enhancing your landscaping. Some banks have departments and programs which focus specifically on home improvement loans so you can get some good advice as well as financing. There will be more “red tape” than with a Title I loan and it will vary from bank to bank. The interest you pay on the loan will also typically be higher than what you pay for a government loan. Title I loans are guaranteed by the FHA so banks can charge lower rates for the reduced loan risk. Your income, credit score, and assets will also play a role in determining both your eligibility and your interest rate.
UPdate December 2018
Are you looking for a relatively small loan but you don’t have a great credit score? Avant is a lender that has a minimum score of just 580 for borrowers to qualify. They make loans in amounts from $2000 to #35,000. And they do charge an origination free of 4.75 % of the amount of the loan. This is about the lowest acceptable credit score rate that we have seen. It can be frustrating but of course borrowers are motivated to confirm that borrowers have a history of paying their bills.
Relatively new on the lending scene are some personal lenders such as SoFi. SoFi started as a lender for those wishing to finance paying off student loans. Today they receive some high marks for their performance in providing funds for debt consolidation of any kind. (Note that some users have complained of problems in their reviews of this lender but overall they score high in customer satisfaction). SoFi is also an option for home improvement financing. They are worth taking a look at but be aware that they require credit scores at or above 660 and you income must be pretty high. Their average borrowers’ median income is over $100,000. And they don’t do business in Nevada. Their loan amounts usually range from five to one hundred thousand with apr’s between 5-15%.
There are also many new online lending platforms which could have some appeal if you are looking for speed and ease. Discover more about them and assess your options at Personal Loans.
Update March 2018 If you want or need to make home improvements but you don’t want to put up your home or other property as collateral, a “peer-lending” web platform may be for you. These lenders (like SoFi, Prosper and others) are becoming more aggressive about going after this market rather than just focusing on helping people consolidate credit card debt. They may also be useful if you are unable to qualify for a home equity line of credit. Be aware, though, that their interest rates are apt to be quite a bit higher than a HELOC (Home Equity Line of Credit). A recent Wall Street Journal article reported that in 2015 and 2016 Prosper charged a rate of about 13.5% for a loan up to $35,000 while HELOCs from banks averaged about 5.5%.