Getting A Housing Repair Loan

As a general rule, especially when you have an expensive investment on your hands like a house, it’s imperative to have a well-funded emergency savings fund in order to support emergency repairs as they are needed. Unfortunately, sometimes homeowners don’t have adequate emergency funds or the repairs required are higher than the amount of cash on hand; when this is the case, a loan may be needed.


Astonishingly, it’s been found that about 25% of homeowners don't have any savings available to take care of any home repairs that come up; that’s a large number, especially considering that fact that it’s reported that about 48% of homeowners have to make emergency repairs within a given 12 months.

In this article, we’ll discuss different options you have for getting a housing repair loan.

Homeowners Insurance Claim

When you’re dealing with a repair needed for your home, your first stop should be checking into your homeowner's insurance to see if it’s a covered item. You may not have to spend anything apart from a deductible if it’s covered.

Home Equity Line of Credit

One of the most popular ways to pay for repairs and renovations to your home is by taking out a home equity line of credit (HELOC). Basically, if you have equity built up in your home resulting from payments you’ve made over time and a possible home value increase, you can sometimes qualify to borrow from the lender against your built-up equity. Remember, however, that this is a loan that is being taken out against your mortgage so you need to be prepared to pay this line of credit off and quickly.

Disaster Relief

FEMA (Federal Emergency Management Agency) and the Red Cross are options you should check into if the repairs you need for your home are due to a disaster. Keep in mind, however, that the funds they provide will allocate just enough for you to be able to live in a safe condition - it will not pay to cover all of your repairs needed.

Credit Cards

While not ideal, sometimes a credit card may be your best option for financing your home’s necessary repairs. If this is the option you go with, be careful of how you do it because you could be paying off your repair at a high-interest rate.

Refinance with Cash Out

Refinancing is another common option when you need funds for your home repair. When you refinance with cash out, you refinance your mortgage and take cash payment on any equity you’ve built up in your home.

Utilizing Community Development Programs

When your home mortgage is through a government plan like FHA or 203(k), you can sometimes borrow additional money for repairs needed by having the costs added to your loan. Major repairs and even household appliances can be covered in the loan if they contribute to your residence being safer or improving the living conditions. Low income and senior homeowners are also often qualified to get loans for repair, or even grants at times, by the USDA Section 504 Home Repair Program.

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