Home Improvement Grants & Loans - U.S.

Shaquille O'Neil can remodel his whole mansion every year without worrying how much it will cost. But for us, average people who don't make millions of dollars a year, something as simple as recarpeting the floor could be a huge deal. If you need to repair or enhance your home but don't have a big enough budget to do so, you can always ask for help. Don't just let your beloved home fall apart. Below are some great sources of home improvement grants and loans you may apply for.

U.S. Department of Housing and Urban Development (HUD)

Title I Home Improvement Loans

Title I loans finance light to moderate property repairs for homeowners, landlords or people purchasing property under a land installment contract. The loans are available through HUD's approved lenders. HUD does not deal with homeowners directly. In order to avoid contractor scams, you should always check the approved-lender list on the HUD website before applying for a Title I loan.

Maximum loan amount: $25,000 for a single-family house, $17,500 for a manufactured house on real estate property, $7,500 for a manufactured house on personal property, and approximately $12,000 per living unit for a multi-family structure (up to a total of $60,000).

Other important information

• Homeowners must have good credit in order to be eligible for a Title I loan.
• If the loan amount exceeds $7,500, it must be secured by a mortgage or deed of trust on the property.
• The house to be repaired must have been completely built and occupied for at least 90 days before you apply for a Title I loan.

The 203 (k) Rehabilitation Program

A 203 (k) loan, just like the Title I Program, is available through approved lenders nationwide. The program can be used to purchase a home and renovate it, OR to purchase a home and move it onto a new foundation on the mortgaged property, then rehabilitate it, OR to refinance an existing mortgage and repair the home. Minor repairs or luxury improvements are not acceptable. Eligible improvements include structural alterations, changes for improved functions and/or elimination of heath and safety hazards. For example, roofing, flooring, repairs of termite damage and installation of solar hot water systems are considered eligible home improvements, whereas room repainting and a home theatre installation are not.

An eligible property (house or condo unit) must be a one-to-four family dwelling that has been completed for at least one year prior to the application. The number of units on the site must not violate the provisions of local zoning requirements. Cooperative units are not eligible.

Indian Home Loan Guarantee Program

Eligible recipients for this loan are Native Americans or Alaskan natives who are members of a federally recognized tribe, a Tribally Designated Housing Entity (TDHE) and an Indian Housing Authority (IHA). The loan can be used for renovation of existing housing, construction of new housing and refinancing indebtedness of existing housing.

To apply for an Indian Home loan, an elligible recipients must contact a HUD-Approved Section 184 lender.

Indian Housing Block Grant Program

The Indian Housing Block Grant Program (IHBG) offers home improvement grants for Native Americans who are members of a federally recognized tribe. The program allows tribes or tribally designated housing entities (TDHEs) to provide affordable housing activities on a reservation or Indian area such as housing development, housing services to eligible families and individuals, and other activities that attempt to solve affordable housing problems.

In order to receive funding, an eligible recipient must submit an Indian Housing Plan (IHP) to HUD each year. At the end of each year, recipients must also submit an Annual Performance Report (APR) showing their progress in meeting the goals and objectives included in their IHPs.

For more information, visit HUD's website.

USDA - Rural Development Housing & Community Facilities Programs

Home Repair Loan and Grant Program - The Home Repair Program provides loans at a 1% interest rate for rural residents with very low income, who own a house in need of repair. The goal of this program is to help low-income families have a safe and sanitary home. Grants are available for senior homeowners (over 62). The loan amount can be up to $20,000, and the grant amount up to $7,500.

For more information, visit USDA's website.

Wells Fargo

Refinance and Renovate Program

This program is suitable for homeowners who have little equity in their house but would like to make home improvements. The loan amount is determined by the increased value of the property after improvements are completed.The application process is very simple: just one application, one set of fees and closing costs, one closing, and then one payment each month. After closing, homeowners can start renovating their home right away. Best of all, it is usually tax deductible, a better way to finance your home renovation than using credit cards or personal loans.

Cash-Out Refinance

This program can be used to refinance a homeowner's existing mortgage, but it will be a higher overall amount, and the homeowner will have to use some of the accumulated equity of the house. Homeowners can choose from fixed or variable interest rate loans and spread the mortgage payments out over a long term in order to lower the monthly cost. Also, it is usually tax deductible.

Home Equity Financing

In stead of refinancing your mortgage using the Cash-Out Refinance Program, the Home Equity Financing Program allows homeowners to keep their existing mortgage intact and supplement it with a lump sum loan or a revolving line of credit. (Loans have fixed-rate interest, and lines of credit have variable-rate interest.) The loan amount can be up to 100% of the value of the house. As for homeowners who choose to get a revolving line of credit, they only have to pay interest on the money they actually spend.

For more information, contact your local Wells Fargo Bank or visit the Wells Fargo website.

Chase

Chase Home Equity Loan

This program is pretty much similar to Wells Fargo Home Equity Financing, but Chase also offers some smart options that allow borrowers to manage the loan and make payments the way they prefer. For example, homeowners can choose the Chase Best Rate option and get a flat fee closing cost of 1% of the total loan amount, OR if they prefer not to pay any up-front cost for their home equity loan, they can choose the No Closing Cost option instead. In addition to that, flexible payment options and easy online account management tools are also available on the Chase website. Customers can access their account any time they want, make or schedule their home equity loan payments, view their account activity and request e-mail alerts.

Chase Equity Line of Credit

Besides getting a credit line to finance your home improvement, Chase Equity Line of Credit also provides you other benefits such as competitive rates, online account management tools and convenient payment options. Customers can decide whether to use the fixed payment option which allows them to budget their money more easily and pay off the debt faster, or the interest-only payment option which helps lower their monthly payment.

For more information, contact your local Chase Bank or visit the Chase website.

• If you have a big home improvement project and would like to pay off your home improvement debt over a long term, a home equity loan is probably a better choice for you, as you will get one lump sum and be allowed to pay off your debt slowly under a fixed interest rate.
• In the case that your home improvement is relatively small or in other words you want to repair or remodel just certain areas in the house, you may want to apply for a home equity credit line instead of a home equity loan, because it can cost you much less. You can pay off your debt faster this way. Moreover, instead of getting one lump sum, you can decide to draw different amounts of money for making home improvements at different times whenever you need it.

If you have a home in need of repair, but you are credit challenged, or your home improvement loan application has been denied before, you can visit the following websites, search for financial institutions that are willing to provide loans for customers with bad credit, get home improvement quotes and decide for yourself which one suits you best.

MortgageLoan.com - This website provides mortage-rate comparison tools, mortgage news, various types of personal finance calculators and useful information about other kinds of loans such as auto loans, student loans and commercial loans.

Mortgageloansbadcredit.com - This website features a mortgage search tool and loan calculator, which can help you access over 1,000 loan programs. Besides working with borrowers with bad credit, they are also willing to assist customers with bankruptcy or customers whose property has been foreclosed.

Eloan.com - E - Loan offers a user-friendly home-equity-rate search tool, loan advising, compare-loan options, payment calculator and debt consolidation counseling. Once you've submitted an application, E-Loan will assign a personal loan consultant for you, and he/she will assist you through the entire process, all the way through closing. Besides having no hidden fees, they also help customers save a lot of money by cutting commissions, eliminating junk fees and offering quite competitive rates.