Transforming the Nation’s Aging Housing Inventory: Financing Solutions for Home Renovations
Many homes affordable to low- and moderate-income homebuyers are decades old, which may necessitate costly repairs. But renovation loans may provide a cost-effective solution for addressing the needs of older homes.
Understanding the Scope of the Housing Renovation Challenge
U.S. housing inventory is aging rapidly. According to the latest data, the median age of owner-occupied homes now exceeds 40 years, meaning many homes are likely to be in need of upgrades and repairs.1 Critical items such as outdated electrical systems, inefficient insulation and aging plumbing may need to be addressed.
The challenge is particularly acute in low- to moderate-income communities, where some owners may lack the necessary financing to undertake essential renovations. Without affordable and accessible financing options, these households may strain to improve the livability of their homes. Additionally, households with damaged credit may face difficulty accessing financing options.
How Renovation Loans Could Help
Renovation loans allow qualified borrowers to finance renovations within the same monthly payment as their regular monthly loan payment. Renovation loans can be purchase loans or refinance* loans, and they can cover many different home renovation and remodeling needs—even major structural changes. That way, borrowers who live in aging homes may be able to improve the safety and livability of their properties.
Some renovation loans are also great for low-to-moderate income borrowers because they accommodate lower credit scores, improving accessibility to financing.
While credit cards can be used to finance renovations, they often carry higher interest rates than renovation loans, which may put a financial strain on low-income borrowers.
Conclusion: Building a Resilient Future Through Home Renovation Financing
The aging U.S. housing inventory is a pressing issue that demands flexible financing solutions. By providing access to affordable renovation loans we can enhance the quality, safety, and energy efficiency of millions of American homes. In doing so, we not only protect the nation’s housing infrastructure but also promote healthier, more resilient communities.
*By refinancing an existing loan, the total refinance charges may be higher over the life of the loan.
Sources:
1 Year Built and Year Moved In | American Community Survey | U.S. Census Bureau
This is not a commitment to lend. All loan programs are subject to credit, underwriting, and property approval. Programs, rates, terms and conditions are subject to change without notice. Other restrictions apply.