Sometimes even 100% financing doesn’t cut it these days but lucky here are at least 7 other options for funding your home improvement projects…
1. Local Grants & Home Buyer Assistance Programs
Most states and cities as well as local organizations have dedicated budgets for assisting home buyers with down payment funds and closing costs to boost homeownership which can be used to acquire a home with less money down and save your cash for redecorating. Many of these organizations also offer grants of low cost loans for critical home improvements. Check it out.
2. Rehab Loans
Special rehab loans are also available for those buying a home or refinancing a mortgage and include cash for repairs and upgrades. Investors will find an array of lenders specializing in these programs while regular buyers can take advantage of the FHA 203k home loan.
3. Home Improvement Stores
Providing your credit isn’t terrible you can normally find good deals on financing materials and tools at your local home improvement stores, often with no payments or interest for a given period of time. The added advantage here is not encumbering your home with this extra debt. Even those with terrible credit could find rent-to-own stores offer a solution for kitting the home out with new appliances as well as furniture for staging.
4. Contractor Financing
Even though most contractors are pretty busy fixing up REOs today many are still happy to offer at least some financing or payment arrangements or will at least have a lender they can refer you to either for a 2nd mortgage or home equity loan (not recommended) or special financing.
5. Get the Seller to Pitch in
Can you get the seller or another party to refund cash back at your real estate closing or provide a credit for any work that needs to be done? This can be tougher today depending on who you are buying a home from and you do need to check the legality of it first before signing. Alternatively ask the seller to fix it or throw in a free upgrade.
6. Tap Poorly Performing Accounts
Instead of borrowing more at higher rates perhaps it’s wiser to tap into savings which is delivering a poor return, borrow against a 401k or using a self-directed IRA.
7. Crowd Funding
Crowd funding sites can be used by those working on special homes and projects to raise additional funds whether as a loan or just to support your cause. Are you restoring a historic building, preserving rare architecture, providing low income housing or helping to revitalize a neighborhood?
