Renovations increase home value and can improve energy efficiency, saving homeowners money in reduced energy costs. Various federal programs provide grant money for home improvements, but not necessarily to individuals. Cities, states and non-profit organizations use these federal grants to fund programs that vary by location. Homeowners should contact their city energy offices and state governments to find out what grants are available. Does this Spark an idea?
Home Repair Loan and Grant Program
The U.S. Department of Agriculture offers grants for low-income seniors 62 and older. Its Home Repair Loan and Grant Program provides qualifying applicants up to $7,500 for repairs that eliminate health and safety hazards such as leaky roofs or poor heating systems. Homeowners may have to return the funds if the home is sold fewer than three years later.
HOME Grant Program
States and localities partner with local nonprofit groups through the U.S. Department of Housing and Urban Development's HOME grant program. HOME funds can be used to rehabilitate housing or to finance a home purchase. Much like the U.S. Department of Agriculture's grant programs, HUD's are targeted at low-income individuals and non-luxury housing.
Community Development Block Grants
Community Development Block Grants are also managed by HUD. All activities seeking CDBG funding must meet at least one of three national objectives, either: benefiting low- and moderate-income persons, preventing or eliminating slums or blight or meeting urgent community development needs where other funding is not available. Federal CDBG funds are distributed to each state and represent an excellent resource for home repair in targeted areas.
Weatherization Assistance Program
The U.S. Department of Energy's Weatherization Assistance Program helps low-income individuals and families make their homes more energy efficient with proper insulation. Seniors and people with disabilities may be eligible; families with children or with high energy burdens may also qualify. Eligible income is that which falls, on average, below 125 percent or 150 percent of the poverty level in the homeowner's state.
Energy Efficiency and Conservation Block Grants
Energy Efficiency and Conservation Block Grants are available through the U.S. Department of Energy and funded by the American Recovery and Reinvestment Act of 2009. Local and state governments, Indian tribes, and territories use these block grants for community projects that reduce energy usage and fossil-fuel emissions. In many instances, funds are then made available to qualifying homeowners for energy efficiency projects such as solar-panel installation.
Energy Efficient Mortgages
Not all households qualify for grants because of income eligibility or other restrictions. Another approach to financing home repairs is the Energy Efficient Mortgage or EEM. Most financial institutions work with these Section 203(k) loans, guaranteed by HUD and the Federal Housing Administration. Unlike traditional mortgages, an EEM can finance the purchase of a home as well as renovations to the property.
Borrowers applying for an EEM may qualify for larger loan amounts, or receive additional financing to make a less efficient home more affordable. Current homeowners can use an EEM to fund repairs that reduce energy costs. The process requires a HERS or Home Energy Rating Systems report to identify a home's current efficiency and give recommendations, while also estimating the cost and useful life of upgrades.
Tags: Block Grants, Assistance Program, Community Development, Community Development Block, Conservation Block, Conservation Block Grants
