Restoration Loans for Historical Homes

Many of us would love to live in an historical home.


There are loans available to restore historical homes.There are loans available to restore historical homes.
The costs of purchase and restoration, however, often can go beyond the affordability level of many families. Fortunately, there are several sources of funding in place to help with the costs of building, repair and restoration. Several low-interest and tax-deductible loans are in place to help families fulfill their dreams of living in a historical home.

According to the U.S. Department of Housing and Urban Development, a primary function of restoring historical and even older homes is to provide housing for single families as well as restore and revitalize neighborhoods. Many older and historical homes exist in urban areas. Because of their age and damage they have suffered, some remain empty. Restoring these homes provides low-cost housing for a family that needs it and slowly brings families back into urban areas, many of which are left abandoned.


There are several benefits of restoration loans. The U.S. Department of Housing and Urban Development offers several low-interest loans. Under its 203K plan, homeowners can borrow up to 110 percent of the appraised value of the home. The funds are released as the restoration work is being completed. This allows the work to start immediately. Under the 203K plan, the home is also insured in its current condition while the restoration work is being carried out. Loans such as this help lower-income families with home restoration and, eventually, ownership.


Before taking on such a project, homeowners need to consider the scale of restoring a historical home. Some communities might have rules and regulations in place regarding materials. There might be limitations in place that prohibit the homeowner from taking out certain features or doing major construction work. Some thorough research needs to be completed on topics such as where to purchase original items. All these factors will affect the total cost of the restoration project and the amount of the loan.


Homes do not have to be hundreds of years old to be considered historical. According to, the National Registry of Historic Places requires that the home be at least 50 years old and look nearly the same as it did when built. States and cities also can set their own criterion for historical homes and districts. Homes of famous people or places that hold cultural significance often qualify as historical homes.


Restoring an old home offers enormous potential. By taking advantage of the restoration loans and grants, homeowners can live in a place that offers a real sense of history. Historical homes also are good financial investments. They nearly always increase in value because of their limited supply. Historical homes also often are located near the centers of cities and urban areas. Their locations offer advantages for commuters with decreased travel times.


Homeowners interested in restoring a historical home have several potential sources of funding available. A great place to start is the U.S. Department of Housing and Urban Development. Through its Federal Housing Administration, flexible loans are made available to help low- to middle-income families buy and restore older homes in urban areas. For homes in rural areas, the U.S. Department of Agriculture offers a similar program. Funds are awarded and can be used for purchase as well as construction and repair costs of homes in rural areas. also suggests that homeowners contact their state historic preservation office. It is a good source of information for funding, loans, grants and tax credits that might possibly be available at the state level. Finally, the National Trust Loan Fund might be able to help with financing. It specializes in offering loans to non-profit entities but is willing to work with real estate developers, especially if the project is in a main street community.

About the Author

Regina Hamilton has been writing off and on since leaving college in 1992. Her experience includes content writing for a legal Web site but has recently moved on into other areas including eHow, Garden Guides and Answerbag. Hamilton has a Master of Fine Arts in creative writing from Ohio State University.