Making It Count: How to Fund Your Next Home Improvement Project

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Home improvement projects to ensure the health and safety of its occupants are not frivolous decisions. These are necessary, and each homeowner must attend to these tasks. There are various low-interest loans that homeowners can avail of to finance these projects. However, they must remember that they must repay their loans; hence, any work done with the funds should be worth it. For low-income homeowners, some grants fund home improvements for health and safety. These grants strictly monitor the use of the funds.

Home Improvement Loans

The Federal Housing Administration (FHA) provides a title 1 home improvement loan to low- and middle-income homeowners who cannot get a home equity loan (HELOC). The maximum loanable amount for a single-unit home is $25,000, with a maximum term of 20 years and 32 days. However, the homeowners must use the loan to make the house livable, covering a wide berth for modifications.

The owner can use it to improve the house structurally, such as to replace the roof or damaged flooring. It can fund the replacement of broken essential appliances such as stoves, refrigerators, and furnaces. It can fund the replacement of dangerous, outdated electrical wiring or plumbing. It can also fund renovations to make the house safer for the elderly or people who have disabilities. However, it cannot fund luxurious amenities like a swimming pool.

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Home Repair Grants for Rural Homeowners

The Home Repair Program of the US Department of Agriculture (USDA) gives loans to rural homeowners with meager incomes who occupy humble single-family dwellings. Again, they must use the loaned amount to repair or improve the home, ensure safety, enhance sanitation, add necessary modernization, or get rid of threats to health and safety. The Rural Housing Service (RHS) will inspect the property and identify essential modifications.

The occupants must have a total household income not exceeding half of the median in their area, and they must not be able to afford any other credit. They can make multiple loans in succession, provided the outstanding amount does not exceed $20,000. The maximum term is 20 years with a fixed interest rate of one percent. If the household cannot afford to pay the loan even at the maximum term, the agency might give part of it as a grant. The owner cannot sell the property within three years or else pay the entire amount.

Access to Clean Drinking Water

Having access to clean water for drinking and other daily needs is a basic human necessity and right. However, many families in rural areas across the country do not have access to a public water system. For these families, the nonprofit Water Well Trust (WWT) provides loans up to $11,000 per household to construct a new water well and well pump system or repair existing ones. The maximum term is 20 years at an interest rate of only one percent. All occupants of the household must have an income not exceeding the non-metropolitan median household income of the state. The funds come from the Household Water Well Systems (HWWS) program of the USDA.

For rural families in similar straits, the Rural Community Assistance Corporation (RCAC) provides loans of up to $15,000 not only to build, repair, or replace water wells but septic systems as well. These water systems are vital for sanitation and health. The loan is available in the 13 states serviced by the RCAC, but the homeowner must reside in an area with a population of not more than 50,000. There are different income caps per state. The maximum term of the loan is 20 years with an interest rate of one percent. If the homeowner cannot afford to pay the entire loan, part of it might be given as a grant. A grant might also be given for the excess amount if the project’s total cost exceeds $15,000.

Home Improvement Grants

The USDA’s Single-Family Housing Repair Grant gives up to $7,500 to rural homeowners who are 62 years old and older and cannot pay back a loan. However, the homeowner must use the grant to eliminate hazards to health and safety from their home. They can also use the grant to add modifications for the accessibility needs of the elderly and those with disabilities. The need for the improvements will be determined by the Rural Housing Service (RHS) upon inspection. The homeowners cannot sell the home within three years from the awarding of the grant. Otherwise, they will have to repay the grant in full.

Whatever the project is, if it keeps the home residents healthy and safe, then the funds are well spent. Monthly amortizations on loan are worth paying for. For projects financed by grants, taxpayers can surely appreciate how their taxes are helping others.

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