Financing Historic Home Preservation

When it comes to historic properties, often the purchase is relatively cheap. That’s because so many historic homes need a great deal of work in order to return to their former glory, and not many homeowners want to take on the task. But for homeowners who have plenty of time and are handy with a toolbox, jumping at the perfect price on an old house might be worth the effort.

An old house in restoration mode. Image credit: Woodblaster.com

However, once the purchase is done, the serious financing starts. The cost of repairs and restoration on that old house can cost far more than the home’s mortgage. When the sticker shock sets in, many homeowners turn to grants, specialized loans and other financial aid to get their project off the ground.

That’s when the second shock sets in: Getting proper funding to restore your home is not easy. In fact, it can take years of paperwork, waiting and more paperwork to start the slightest trickle of money coming in. But if you have the perseverance to keep at it and the patience to handle much of the work on your own, it’s possible to hold out until the funding does arrive in your bank account.

Here are a few places to start:

1. In 2010, the National Trust for Historic Preservation awarded more than $61 million in grants, loans and direct equity investments. Even if your project doesn’t qualify for the programs offered by the National Trust, they can point you to many other resources that could suit your needs.
2. Your State Historic Preservation Office might have funds for those who are restoring a home that has a strong tie to community or state history. Each state has a publicly funded SHPO that might have access to funds for distribution to historic home owners.
3. The U.S. Department of Housing and Urban Development offers a specialized mortgage for those who restore their property. There are many guidelines in order to qualify, so pay careful attention to the fine print on this one.
4. The U.S. Department of Agriculture’s Rural Housing Service offers funds for the restoration of homes in rural areas. The funds are available to low-income and moderate-income residents. Again, remember the fine print when applying.
5. If you are one of the lucky homeowners who can claim a National Historic Landmark, you might qualify for funds through the National Historic Landmarks Program.
6. If you live in an old property that could be maintained as a museum, the Museum Assessment Program might be interested in helping you with funding.
7. Was your old house abandoned? Was it a foreclosure? Then consider help from the Neighborhood Stabilization Program from HUD, which provides grants to help communities revitalize areas that have been hit hard by foreclosures and abandonments.
8. If your old house has rare or unusual architecture, the National Endowment for the Arts might be able to help. Keep in mind that this is a long shot, but if you have a house worthy of competing for the funds, you might as well give it a go.

Of course, nothing beats the old standby: private loans through your local bank, help from family and friends, and a healthy savings account. Sometimes restoration funds take a long time to trickle down to your home, so when you purchase an old house that needs repair and improvement, expect to be living in a quaint and charming construction zone for a while.