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How to Find the Right Home Repair Grant

Paying for major home repairs and improvements can be a challenge for low- to moderate-income homeowners. That’s why government agencies offer home repair grants, which are free financial assistance programs that help some homeowners pay for repairs and upgrades to their homes.

In this article:

What is a home repair grant?

A home repair grant, also called a home improvement grant, is a type of financial assistance offered by federal, state or city governments to help repair or update your home. Home repair grants are not home improvement loans; they act like free money, but you must meet specific eligibility and project requirements.

In many cases, home renovation grants are geared toward very-low-income homeowners or specific populations, such as disabled veterans or elderly homeowners, for example.

Where do I find home repair grants?

Several federal agencies provide home improvement grants. Here’s a look at the most common programs:

Federal home repair grants

  • HUD’s HOME Rehabilitation Program. Sponsored by the U.S. Department of Housing and Urban Development (HUD), this is the largest federal program that helps low-income homeowners make repairs or upgrades to their homes.
  • HUD Community Development Block Grant Program. Another HUD program, this grant provides funding to local communities to help prevent homes and neighborhoods from becoming blighted or falling into disrepair.
  • VA Specially Adapted Housing Grant or Special Housing Adaptation Grant. The U.S. Department of Veterans Affairs (VA) provides free home repair assistance to military borrowers with disabilities related to their service to help them buy or build an adapted home, or modify an existing property to adapt it to their needs.
  • USDA Single-Family Housing Repair Loan and Grant Program. The U.S. Department of Agriculture (USDA) offers home repair assistance called the Section 504 Home Repair Program for very low-income homeowners in USDA-eligible rural areas. You can get a grant of up to $7,500 to remove health and safety hazards in the home only. A loan of up to $20,000 at a fixed interest rate of 1% can be used to repair or upgrade your home or address health and safety hazards. Loans and grants can be combined.
  • Native American Housing Improvement Program. Administered by the Bureau of Indian Affairs (BIA), this home improvement grant is for low-income members of federally recognized Indian tribes. It can also be used to purchase a home.

Additionally, the National Residential Improvement Association (NRIA) can help you apply for a home remodeling grant. The organization helps homeowners find home renovation grants at no cost based on their home’s condition, history and project needs.

Who’s eligible for a home repair grant?

Eligibility guidelines will vary by home repair assistance program. Here’s a look at the requirements for the federal programs listed above.

HOME Rehabilitation Program

  • Have a low income
  • Occupy the home as a primary residence
  • Value of property after repairs/upgrades cannot exceed 95% of your area’s median purchase price

HUD Community Development Block Grant Program

  • Must meet HUD income limits for the median income in your area
  • Other eligibility guidelines vary by grant type

VA Specially Adapted Housing Grant/Special Housing Adaptation Grant

  • Must be a U.S. military veteran with a permanent and service-connected disability
  • Home must be your permanent and primary residence
  • Home must be owned by an eligible veteran or family member
  • Specific disability requirements vary by type of grant you choose

USDA Single-Family Housing Repair Loans and Grants

  • Live in a USDA-eligible area
  • Home must be your primary residence
  • Unable to obtain affordable credit elsewhere
  • Household income is below 50% of the area median income
  • Be age 62 or older and not able to repay a repair loan

Native American Housing Improvement Program

  • Be a member of a federally recognized tribe
  • Have a very low income

How to apply for a home repair grant

To apply for one of these federal housing assistance grant programs, you’ll need to provide much of the same documentation you showed a loan officer when you took out a mortgage. You’ll need to show proof of income and documentation to prove your status as (or relation to) a military veteran, or member of a federally recognized tribe. Check with the individual grant administrator or your local housing agency for specific application instructions.

Other financing options if you don’t qualify for a home repair grant

If you don’t qualify for one of these home improvement grants, there are other options to help pay for home repairs or renovations. The programs below require you to take out a loan, and some will require having significant equity in your home, good credit and a manageable debt-to-income ratio.

Here are options if you have less-than-ideal credit:

FHA 203(k) loan. The Federal Housing Administration offers the FHA 203(k) rehabilitation loan program to help borrowers roll the cost of renovations into their mortgage. The 203(k) Limited program provides up to $35,000 for minor and non-structural renovations. The Standard 203(k) is for projects totaling $5,000 or more.

Energy Efficient Mortgage (EEM). Backed by the FHA, the EEM program allows borrowers to finance energy-efficient upgrades into their existing mortgage. An energy assessment is required to determine what types of renovations are needed and how cost-effective they are. (Military borrowers can use a special VA loan program to make energy-efficient upgrades.)

Here are alternatives for borrowers with stronger credit profiles:

HomeStyle Renovation loans. Fannie Mae offers a special home remodeling loan program that allows you to combine renovation costs into your mortgage when you buy or refinance a home.

Home equity loan. A home equity loan is a lump-sum, fixed-rate loan that allows you to borrow up to 85% of the equity in your house.

Home equity line of credit. Unlike a home equity loan, a HELOC, or home equity line of credit, acts like a credit card. Instead of a lump sum, you get a revolving line of credit that you can draw on whenever you need it over time. HELOCs tend to have variable interest rates, making your payments fluctuate.

Cash-out refinance. A cash-out refinance refinances your existing loan with a new mortgage for a larger amount, allowing you to withdraw the difference between your existing mortgage balance and the new loan amount in cash. You need to have at least 20% equity in your home to do a conventional cash-out refinance.

 

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