Will The Government Pay Me to Remodel My Home?

Will The Government Pay Me to Remodel My Home?Maybe you’ve seen them…blogs and ads that say the government will pay you to remodel your home.

Is this true?

Well, in effect you could say it works out that way, but as is the case when you’re dealing with a governmental entity the devil is in the details.

You won’t get a check directly from Uncle Sam to add a pool to your backyard…but if you’re planning a remodel that includes upgrades that the government wants you to do, then yes, you could get some money to pay you to remodel.

Why would they pay you to remodel your home?

As the real estate industry makes up a sizeable portion of the US economy, the government is invested in improving housing stock, to help ensure stable communities and by extension the economies both locally and across the country.

Here are just some of the following government programs (as of the time of this writing) that could reimburse you for upgrades you were planning on doing anyway.:

Some caveats:

  • ⬥The programs are for current or future projects only – they don’t work retroactively.
  • ⬥They won’t pay for luxury items
  • ⬥They are mainly for basic renovations


Note: The idea of a renovation the government will pay for is that it should upgrade the property’s value.

So for example, if you’re replacing a composite roof with another composite roof, the upgrades don’t qualify. If, however, you’re upgrading to a higher quality material, they could be approved for a property tax exemption.

FHA 203(k) Rehab Loan

While this doesn’t mean you’re paid to buy and remodel a home, this type of loan is used to help with the purchase and remodeling of a home that needs repair…even to the point of demolishing the existing property and building a new one.

Essentially the government – through the US Department of Housing and Urban Development (HUD) will insure your lender when you purchase a home that needs remodeled to encourage the lenders to lend.

This is because a home that is in need of renovating will often not provide enough collateral to encourage lenders to finance the deal.

Which helps you wrap up the project and move into your new (or newly renovated) home.

Note: This program requires oversight to ensure that the project is genuine and is being done according to plans.

Fannie Mae Homestyle Renovation

Unlike the 203(K) loan, this is a conventional loan for home buyers, home owners and even investors who need a loan to rehab or remodel a home.

It also has more options on the types of properties that are allowed to be financed, giving borrowers more choices in financing.

Some property types allowed:

  • Primary residence
  • Vacation home
  • Investment rental unit (townhouse, house, condo)

Property tax deductions

  • ⬥Total or partial exemptions allowed for home remodels
  • ⬥Eligibility and amount vary by county or town
  • ⬥Must be owner occupied (in most cases)

Note: The scope of a remodel that may be eligible is defined in broad terms (e.g. material, permanent property improvements, actual improvements, etc.) but they must increase the home’s value

Home improvement programs (HIPs)

Counties or local governments subsidize the lending costs on home remodeling loans, either in full or in part.

Generally speaking, the project must be for:

  • ⬥an existing property
  • ⬥low income individuals
  • ⬥general upgrades (not luxury items)


USDA Single Family Housing Repair Grants

Qualifications to obtain these grants which could be up to $7,500 (as of the time of this writing):

  • ⬥Must be owner occupied and aged 62 or older living in USDA designated areas
  • ⬥Must be to repair, retrofit or remodel the home
  • ⬥Focused on upgrades that address health and safety issues
  • ⬥Must live in the home for an additional 3 years after receiving the grant
  • ⬥Family income must be less than 50% of the median income in the area


Disabled Veterans Housing Grants

Eligible veterans can obtain these grants which could be up to $77,307 (as of the time of this writing).

Known as Specialty Adapted Housing (SAH) or Special Housing Adaptation (SHA) grants, these housing grants are for building, adapting or remodeling homes for disabled veterans. 

Solar Energy Rebates

Many cities offer rebate programs to encourage homeowners to install solar panels on their homes. Large federal and state block grants are the funding source for these rebates, which can help you recover some of the cost of outfitting your home with solar.

Note: In some cases income guidelines can dictate how large the rebate can be, so check with your local utility company for information about programs available in your area.

These are just some of the options available that can help homeowners save money on their home remodel. It’s recommended to consult an experienced mortgage broker to help you consider the options available that may apply to your area and your particular situation.