One sure way to increase a home’s value is with a remodel. Be it a sparkling new kitchen or a complete redo of the master bedroom and bath, home renovations bring properties up to date while refreshing the look of the home at the same time. But while updating a home will increase the value of the property while pleasing the eyes of its owners, sometimes the costs are just too much for many to handle. Fortunately, there are programs designed for lower income borrowers to make home repairs and modifications.
The United States Department of Agriculture, or USDA, provides guidelines lenders use known as the Section 504 program. This program provides necessary funds to repair and renovate homes specifically for those with very low or low income. As long as the household income at below 50 percent of the median area income, homeowners can take advantage of the 504 product. Homeowners can borrow up to $20,000 for a renovation and receive a grant in the amount of $7,500. With the grant, the money does not have to be repaid unless the home is sold within three years of the initial award.
Eligible homeowners may also apply for a loan program introduced by the Department of Housing and Urban Development, or HUD. The Federal Housing Administration, or FHA provides guidelines for what is referred to as a Title I loan. This loan is designed to finance moderate rehabilitation of an owner occupied property for up to $25,000.
There are choices available and there are differences among them. If you’re curious about these and other options, your loan officer can help guide you through the process.