There are several types of restoration loans available for old houses, specifically designed to finance the renovation and restoration of historic or older properties. As financing for homes under $150,000 becomes harder to come by, some ingenuity may be required to find the right fit! Read Ethan Finkelstein’s advice on securing a mortgage for an old house in this MarketWatch piece, here.

Here are some common types of restoration loans to further research:

1) FHA 203(k) Loan:

The FHA 203(k) loan is a popular option for financing the restoration of old houses. It allows borrowers to combine the purchase price and renovation costs into a single mortgage loan. There are two types of FHA 203(k) loans: the Limited 203(k) for minor repairs and the Standard 203(k) for more extensive renovations. These loans are insured by the Federal Housing Administration (FHA).

2) Fannie Mae HomeStyle Loan:

The Fannie Mae HomeStyle loan is another renovation loan option for old houses. It allows borrowers to finance both the purchase price and renovation costs in a single loan. The HomeStyle loan offers flexibility in terms of property types, including older or historic homes. The loan is conventional, meaning it is not backed by the government.

3) VA Renovation Loan:

The VA Renovation loan is specifically designed for eligible veterans, active-duty military personnel, and their spouses. This loan allows borrowers to finance both the purchase of an older home and the cost of renovations. The VA Renovation loan is backed by the Department of Veterans Affairs (VA).

4) Energy Efficient Mortgage (EEM):

An Energy Efficient Mortgage is not specific to old houses, but it can be utilized to finance energy-efficient improvements in older homes during the renovation process. This type of loan allows borrowers to add the cost of energy-efficient upgrades to their mortgage, helping to reduce utility costs and improve energy efficiency.

5) State and Local Historic Preservation Loans:

Some states or local governments offer restoration loans specifically tailored for historic properties. These loans may provide favorable terms and incentives to encourage the preservation and restoration of historic homes. Check with your state’s historic preservation office or local government to inquire about any available loan programs.

6) Private Renovation Loans:

Private lenders, such as banks, credit unions, and specialized renovation lenders, may offer renovation loans for old houses. These loans can be more flexible and customized to the specific renovation needs of the property. Private renovation loans typically have varying terms and eligibility requirements, so it’s important to shop around and compare options.

When considering restoration loans for old houses, it’s crucial to research and understand the specific requirements, terms, interest rates, and limitations of each loan program. Consulting with lenders, mortgage professionals, and historic preservation organizations can provide valuable guidance in selecting the most suitable loan option for your renovation project.