Government Grants for Home Improvement

What Are Government Grants for Home Improvement?

Government grants for home improvement are a form of financial assistance designed to pay for essential home repairs and upgrades. You can find these government-backed programs at the federal, state and local levels.

A key benefit of grants is that they don't need to be repaid—though some programs provide low-cost repayable loans to eligible homeowners instead of grants. In both cases, recipients use the funds to improve the safety, accessibility and livability of their homes. The grants and loans typically aren't available for cosmetic repairs.

Home repair grants and affordable loans are typically very competitive and come with strict eligibility criteria, which depend on the grant in question.

Types of Government Grants for Home Improvement

There are several types of government-issued home improvement grants, including:

HOME Investment Partnerships Program

The HOME Investment Partnerships Program (HOME) is a federal program that provides grants to state and local governments. In turn, those governments use the funds for a wide variety of affordable housing activities to benefit low-income households, including assistance in rehabilitating a home.

Qualification Requirements

• Meet household income limits, which are set by the U.S. Department of Housing and Urban Development (HUD)
• Meet limits on the property value of the home
• Potentially meet other requirements through the state or local program

What Can It Be Used For?

• Building a home
• Purchasing a home
• Rehabilitating a home
• Providing rental assistance to low-income individuals or families
• Paying for relocation expenses
• Demolishing a dilapidated house
• Acquiring or improving a housing site

Section 504 Home Repair Program

The Section 504 Home Repair Program provides financial assistance for low-income homeowners to repair, improve or modernize their homes. Elderly low-income homeowners may qualify for grants and can use the money to remove health and safety hazards. The program is overseen by the U.S. Department of Agriculture (USDA).

Qualification Requirements

• Own a home in a rural area
• Occupy the home
• Show that you can't qualify for affordable credit elsewhere
• Meet household income limits by county
• Be age 62 or older (for grants)

What Can It Be Used For?

• Loan funds can be used to repair, improve or modernize homes, or to remove health and safety hazards
• Grant funds can only be used to deal with health and safety hazards

Housing Improvement Program

The Housing Improvement Program (HIP) is designed to end homelessness in American Indian and Alaska Native communities by providing grants for safer homes. Through the program, individuals and families may qualify for grants to pay for home repairs, replacements, renovations and new housing.

Qualification Requirements

• Be an Alaska Native or a member of a federally recognized American Indian tribe
• Live in an approved tribal service area
• Meet income limits
• Have substandard housing and no other resource for housing assistance
• Have not used a federally sponsored housing program to get your current housing

What Can It Be Used For?

• Housing repairs for conditions that threaten your health and/or safety
• Repairs and renovations to help your house meet building code standards
• A modest replacement home if your current home can't be brought to building code standards
• A modest new home if you don't own one

VA Specially Adapted Housing (SAH) Grant

The Veterans Affairs (VA) Specially Adapted Housing Grant is a federal program that provides grants to veterans and service members with service-connected disabilities. Recipients can use the funds for a wide range of purposes—all geared toward renovating the home to meet their individual needs. For example, you might have ramps installed or doorways widened if you're in a wheelchair.

Tip: Only 120 veterans and service members per year can qualify for this type of grant, and you must have lost at least one extremity after September 11, 2001.

Qualification Requirements

• Own a home or will own a home
• Have a qualifying service-connected disability

What Can It Be Used For?

• Buy or build a home
• Alter your permanent home to meet disability needs

How to Get a Government Home Improvement Grant

Getting a government home improvement grant typically involves applying through a local, state or federal program. The application process may vary, depending on the specific program, but here are the general steps you'll take:

1. Research Federal Programs

The programs listed above can give you a good starting point when you're looking for government grants for home improvement. You can also widen your search by contacting your regional HUD office and asking about programs in your area.

Then check your state housing finance agency for more information. These agencies often administer federal funds (like HUD grants) locally.

2. Check State and Local Resources

Head to the official website for your state or local government and look for the office that handles housing assistance. You may also find the same information on HUD's state information pages. From here, you can find a housing counselor, check your home improvement options, find alternative programs and more.

3. Confirm Your Eligibility

You'll need to meet eligibility criteria to qualify for home improvement grants or loans. The requirements vary with each program, but they often include income limits and restrictions on how you can use the funds. Before moving forward, make sure you meet requirements and have the documentation to support your application.

4. Gather Required Documents and Apply

Prepare any documents you'll need to submit with your application. For example, you may need tax returns and pay stubs to verify your income. Make copies of the documents and get started with your application.

Alternatives to Government Home Improvement Grants

If you're ineligible for a government home improvement grant, consider the following alternatives:

• Cash-out refinance: A cash-out refinance involves taking out a new mortgage for more than you currently owe, paying off your old loan and pocketing the difference as cash. This may be a good option if you've built significant equity in your home.
• Home equity line of credit (HELOC): A HELOC allows you to borrow money as needed up to your credit limit, and only pay interest on the amount you borrow. Choose this option over a cash-out refinance if you don't want to change your mortgage loan terms.
• Weatherization assistance program (WAP): The weatherization assistance program provides free weatherization services to low-income families, which helps permanently reduce energy bills. You can apply at the state level.

The Bottom Line

Government grants for home improvement may help you pay for the costs of renovating your home to address health or safety needs.

If you're ineligible for a government-backed home repair program, you might consider applying for a second mortgage (such as a HELOC) or another type of loan. Having good credit can improve your chances of qualifying for the loan and securing favorable terms. You can check your Experian credit report and FICO^® Score^☉ for free to see where you stand.