| Few people realize that they have access to a | | | | |
| potentially large number of different grants | | | | An eligible property must meet the following |
| and loan schemes that can give them the funds | | | | criteria: |
| they need to repair their home, or even to | | | | |
| allow them to afford to purchase a home. | | | | - A 1-4 family dwelling |
| There is a very large number of such schemes | | | | |
| available to US residents, many of which are | | | | - A property must require at least $5,000 |
| backed by federal agencies such as the | | | | worth of repairs (cosmetic repairs such as |
| Department of Housing and Urban Development | | | | repainting by themselves are not acceptable, |
| (HUD). | | | | but can be included in the total) |
| | | | |
| Home Repair Grants | | | | - Construction has been complete for at least |
| | | | one year |
| Home repair grants can be obtained in a | | | | |
| number of different places, and are | | | | - Property must conform to all local zoning |
| surprisingly easy to apply for-at for | | | | requirements |
| example, anyone can sign up and search a | | | | |
| database of federal grants that they can | | | | - Homes that have been or will be demolished |
| apply for providing they meet the required | | | | as part of the rehabilitation plan are |
| criteria. The web site of the Catalog of | | | | eligible as long as at least part of the |
| Federal Domestic Assistance ( also provides | | | | existing foundations will remain. |
| an extensive list of different types of | | | | |
| housing grants and loan schemes for a wide | | | | - Condominiums may qualify as long as the |
| variety of different purposes, and for | | | | condo is owner-occupied, rehabilitation is |
| different groups of people. Each has | | | | limited to the interior, and the maximum |
| different eligibility criteria-some, for | | | | amount borrowed does not exceed 100% of the |
| example, are open only to senior citizens, | | | | value after rehabilitation. |
| while others are open only to residents of | | | | |
| rural areas, and still others are open to | | | | - Refinancing a home you currently own with |
| anyone who occupies the property they wish to | | | | the intention of rehabilitating is also |
| apply for a grant for. Most people, | | | | permitted. |
| therefore, will generally qualify for at | | | | |
| least one type of home repair or other | | | | There are also some rules as to how long |
| housing grant. | | | | rehabilitation may take. First, work on the |
| | | | property must begin within 30 days of the |
| The HUD Section 203(k) Mortgage Plan | | | | agreement being executed. Second, work on the |
| | | | property must not be stopped for more than 30 |
| The US Federal Housing Association (FHA) | | | | consecutive days. Third, the work must be |
| currently administers several HUD home repair | | | | completed in full within a specified time |
| and rehabilitation schemes. These schemes are | | | | period (typically six months). |
| designed to help people and communities | | | | |
| rehabilitate their homes, and are also | | | | What Improvements are Eligible for Financing? |
| intended as a way of increasing opportunities | | | | |
| for home ownership. | | | | In general, any luxury improvements are not |
| | | | eligible for financing. Any improvements that |
| The most extensive HUD rehabilitation program | | | | are not part of the property are also |
| is known as Section 203(k), and is designed | | | | prohibited. However, the money can be used to |
| to provide families with a means of obtaining | | | | finance room additions, building decks and |
| permanent financing for homes that require | | | | similar structures. In addition, all |
| extensive rehabilitation. Lenders do not | | | | applicable improvements must meet certain |
| normally finance such homes, as the condition | | | | energy conservation standards. |
| and value of such properties rarely matches | | | | |
| up to the amount borrowed. In these | | | | Energy-Efficient Mortgages |
| situations, the borrower must get an interim | | | | |
| loan, usually at a higher interest rate, to | | | | HUD also backs an energy-efficient mortgage |
| purchase the house, and then a second loan | | | | program that helps home buyers or owners |
| for money to do construction and | | | | purchase an energy-efficient home, or |
| rehabilitation work. Only when the house is | | | | refinance and remodel their existing home to |
| complete can the borrower apply for a | | | | become more energy-efficient. Almost anyone |
| mortgage to pay off the existing loans. | | | | is eligible to apply for such a mortgage, |
| | | | providing they meet certain income |
| Section 203(k) allows borrowers to get a | | | | requirements and can prove their ability to |
| mortgage that covers the costs of the | | | | pay the loan. The improvements made must also |
| purchase and the rehabilitation of a property | | | | meet eligibility criteria-the total cost of |
| at the time of purchase-before the | | | | the improvements must be less than the value |
| rehabilitation work has even begun. Funds are | | | | of the energy that the applicant will save by |
| provided both to purchase the property and | | | | adding energy-efficient improvements to their |
| for rehabilitation, based on the projected | | | | home. There is also a limit on the amount of |
| value of the home after the work has been | | | | money that can be borrowed for |
| completed. The mortgage is endorsed by HUD to | | | | energy-efficient improvements. This is the |
| reduce risk to the lender. | | | | greater of $4,000 or 5% of the current value |
| | | | of the property. |
| Is your Home Eligible? | | | | |