A Comprehensive Guide to Funding Options for Restoring Old Houses

Restoring old houses is a rewarding endeavor that helps preserve architectural heritage and adds value to communities. However, funding such restoration projects can be a significant challenge. In this guide, we will explore various funding options available to individuals and organizations interested in restoring old houses. From grants and loans to tax incentives and crowdfunding, we will cover a range of strategies to help you secure the necessary funds for your restoration project with this guide to funding options for restoring old houses.  Links to programs are provided at the bottom half of the page.

 

Research and Planning

Before seeking funding, conducting thorough research and creating a detailed restoration plan is crucial. This includes assessing the condition of the house, estimating costs, and developing a timeline for the project. A well-prepared plan will be essential when approaching potential funders, as it demonstrates your commitment and professionalism.

 

 

 

Historic Preservation Grants

Numerous organizations and government agencies offer grants specifically aimed at historic preservation projects. Research national, state, and local grants that may be available in your area. Some popular grant programs include the National Park Service’s Historic Preservation Fund, the National Trust for Historic Preservation grants, and state-level historic preservation grants. Each program will have specific eligibility criteria and application processes, so carefully review their guidelines before applying.

 

 

Community Development Block Grants (CDBG)

The U.S. Department of Housing and Urban Development (HUD) provides Community Development Block Grants to local governments, which can be used for a variety of community development activities, including housing rehabilitation. Contact your local government or community development office to inquire about the availability of CDBG funds for your restoration project.

 

Low-Interest Loans

Financial institutions, such as banks or credit unions, may offer low-interest loans or lines of credit for home restoration projects. These loans can be specifically tailored for historic preservation, offering favorable terms and conditions. Consult with multiple lenders to compare interest rates, repayment terms, and requirements for loan approval.

 

Tax Incentives

Explore tax incentives and credits available for historic preservation projects. The federal government offers the Historic Rehabilitation Tax Credit, which can provide substantial financial benefits for eligible projects. Additionally, some states and local municipalities may have their own tax incentives or property tax abatements for historic preservation efforts. Consult with a tax professional to understand the specific tax benefits applicable to your project.

 

Crowdfunding and Fundraising

Crowdfunding platforms, such as Kickstarter, GoFundMe, or Indiegogo, can be effective ways to raise funds for your restoration project. Craft a compelling campaign that highlights the historical significance of the house and the community impact of its restoration. Engage local residents, preservation enthusiasts, and potential donors through social media and community events to maximize your fundraising efforts.

 

 

Partnerships and Sponsorships

Consider forming partnerships with local businesses, corporations, or nonprofits that may be interested in supporting historic preservation. They may offer financial contributions, in-kind donations, or volunteer resources. Identify organizations that align with your restoration goals and approach them with a well-defined partnership proposal.

 

Personal Investment and Sweat Equity

Investing your own funds and dedicating personal time and skills to the restoration project demonstrates your commitment and can help attract additional funding. Personal investment could include savings, home equity loans, or utilizing retirement savings through programs like a self-directed IRA. Additionally, volunteering labor and skills can help reduce costs and showcase your dedication to the project.

Here are specific historic preservation funding resources with their respective links:

FHA 203(k) Loan: The FHA 203(k) loan is a great option for financing both the purchase price and the cost of expected repairs in the restoration of old houses. Borrowers can combine the purchase price and renovation costs into a single mortgage loan.  Insured by the Federal Housing Administration (FHA), there are two types of FHA 203(k) loans: the Limited 203(k) for minor repairs and the Standard 203(k) for larger projects.  Check out www.nerdwallet.com to compare rates.

Fannie Mae HomeStyle Loan: The Fannie Mae HomeStyle loan also allows borrowers to finance both the purchase price and renovation costs in a single loan. The loan is conventional, meaning it is not backed by the government. For more information, check out www.forbes.com

VA Renovation Loan: The VA Renovation loan, aka, the VA Reno,  is open for eligible veterans, active-duty military personnel, and their spouses. Like the FHA 203(k) loan, this VA loan allows borrowers to finance both the purchase of an older home and the cost of renovations. It is backed by the Department of Veterans Affairs (VA). www.vanationwide.com is one source.

National Park Service (NPS) Grants: The NPS offers various grant programs for historic preservation, including the Historic Preservation Fund (HPF) grants. These grants support a wide range of preservation projects. Visit the NPS Grants page for more information: https://www.nps.gov/

National Trust for Historic Preservation Grants: The National Trust for Historic Preservation provides grants to support preservation projects across the United States. They offer several grant programs, including the Preservation Fund Grant. Explore their grant opportunities here: https://savingplaces.org/grants

U.S. Department of Housing and Urban Development (HUD) Community Development Block Grants (CDBG): CDBG funds are allocated to local governments to support community development activities, including housing rehabilitation and historic preservation. Contact your local government or visit HUD’s CDBG page for more information: https://www.hudexchange.info/programs/cdbg/

State Historic Preservation Offices (SHPO): Each state in the U.S. has a State Historic Preservation Office that provides grants and funding opportunities for historic preservation projects. Locate your state’s SHPO website to explore available grants specific to your region.

Historic Rehabilitation Tax Credit: The federal government offers the Historic Rehabilitation Tax Credit, which provides tax incentives for the rehabilitation of historic properties. Learn more about this tax credit on the National Park Service’s Tax Incentives page: https://www.nps.gov/tps/tax-incentives.htm

State and Local Tax Incentives: Many states and local municipalities offer their own tax incentives and property tax abatements for historic preservation projects. Research the specific tax benefits available in your area by contacting your state’s historic preservation office or local government.

Grants.gov: Grants.gov is a comprehensive database that lists various grants available across different government agencies. Search for historic preservation grants by selecting relevant categories and keywords: https://www.grants.gov/

Crowdfunding Platforms: Platforms like Kickstarter, GoFundMe, and Indiegogo allow individuals to create campaigns and raise funds for specific projects, including historic preservation. Explore these platforms and create a compelling campaign to attract donors.

 

 

Remember to review each funding resource’s eligibility criteria, deadlines, and application requirements carefully before applying. Good luck with your historic preservation project!

Conclusion

Funding for restoring old houses requires diligence, creativity, and perseverance. By exploring the various options outlined in this guide, you can increase your chances of securing the necessary funds. Remember to thoroughly research and plan your restoration project, tailor your funding applications to specific programs, and engage with the community to generate support. With determination and the right funding strategy, you can successfully restore an old house and contribute to preserving architectural heritage for future generations.