The purpose of any Government grant is to provide stimulus that will have a tangible result in an economic or social sector.  Home improvement grants are no different and that motivation for the provision of funding to repurpose or renovate existing homes in the United States has some very measurable advantages for the economy and helps to address other economic maladies at the same time.

With the onset of “the credit crunch” or the restrictions by lenders to provide credit for new home purchases, the amount of new home sales in the Unites States began to slowly decline.  This decline is not only due to more stringent lending policies by chartered banks but also in response to consumer hesitancy to enter into new mortgages given the unpredictability of the global economy and the rising unemployment rate in the United States.  Fewer homes are being built because of the excess of new home inventory on the market.  While these homes sit vacant hundreds of thousands of skill trades laborers in construction (builders, contractors, heavy equipment operators, electricians, masons and plumbers) remain unemployed or under employed.  So rather than contributing to the glut of unsold homes and contributing to the growing American unemployment rate, it is far better to get Americans back to work by creating demand for their trade skills.

By encouraging home owners to invest in the renovation and restructuring of their homes, it reduces the effects of the housing bubble by reducing the number of new home builds or start ups.  In order to successfully entice homeowners into renovating existing housing the cost of the renovations needed to be addressed.   Just as the average person would sooner side with caution during unstable economic times and hesitate to enter into a mortgage for a new home purchase due to financial concerns, so too would they experience some difficulty in financing large renovation projects.  The last thing most people want to do in the current economy is add to their debt.

In response to this the United States Government developed an incentive plan to encourage home owners to take on capital renovation projects rather than purchase new homes.  Renovations to exisiting structures also have the potential to increase the number of residential units available in the United States addressing the need for more shared housing or rental properties.  Regardless however of the motivating factors, the intention is to facilitate investment in private homes and the popular incentive appeared in the federal legislation called the 203k mortgage.

A Financing Alternative

The 203k mortgage refers to Section 10 1 (c) (1) of the Housing and Community Development Amendments of 1978 (Public Law 95557) amends Section 203(k) of the National Housing Act (NHA). The objective of the revision is to “facilitate the restoration and preservation of the Nation’s existing housing stock.”

The best case scenario to consider is the purchase of a new home which may require renovation.  If the home owner decided to contribute and renovate his or her current structure to create more space for family members or for additional privacy, the addition or improvement would have to be financed (in most cases) by the bank.  However it may not be possible to secure financing for more than the value of the home as most banks cap lending limits to the maximum valuation of the asset (the home). This is done to ensure their investment capital as much as possible in a very volatile economical environment. This is the only loan security the bank really has.

The 203k plan allows for the borrowing against a preexisting mortgage to finance improvements (cosmetic and structural) without charging excessive fees.

Eligibility Requirements

In order for a residential property to be eligible to qualify for home improvement grants, it must meet a set of criteria established in Section 203(k) of the National Housing Act (NHA).  These guidelines are in place to ensure that the appropriate residential structures receive the investment monies to expand and meet a variety of needs and new residents.

In order to qualify for a home improvement grant in the United States the project must meet the following criteria:

• Properties of 1-4 person family dwellings that have been completed (constructed) for a minimum of one year
• Zoned according to maximum provisions of local zoning requirements
• All new construction units (wings or legal apartments or additions) must be attached to the main dwelling or principal structure
• Co-operative dwellings are not permitted
• Demolished homes that are rebuilt on the existing foundation are qualified
• Conversions which create more living space from one family to two, three or four family dwellings
• Modular units can qualify if mounted on an inspected foundation
• Properties which are “mixed use” whereas the property cannot have more than 25% to 40% of commercial floor space below a residential unit.
• Properties which are deemed “mixed use” will not deteriorate or compromise the health of other individuals in the area
• The health and safety of the project must not impeded residents, commercial owners or other property owners when completed

One of the criticisms of the 203k Plan is that it takes the onus of the United States Federal Government to invest in what most lobbyists refer to as “economical housing”.  There is a growing concern for the provision of affordable housing in the United States and new housing projects for low income residents are not forthcoming in the budgets.  Not everyone can afford a house.  Those that cannot require quality housing at an affordable rate to actively engage them in the economy.

Whatever the true intention of the 203K Plan it is certain that it is designed to have a number of benefits.  By making it easier to borrow for capital projects against the equity in the home, it helps to combat transient housing by encouraging individuals to invest in their own properties.  With the correct financing in order, adding an extra floor or even a basement apartment has never been easier with a home improvement grant.

With the recession recession that has occurred many people are struggling to find different sources of income.  If you are looking for a way to help boost your income you should consider applying for alternative sources of income.  If you are low income, a minority, a student, disabled or have any kind of condition, you should consider applying for a government grant for individuals.

Most people aren’t aware that there are thousands of grants that are designed for people of all backgrounds.  You could be an African American that is looking to get financial assistance with your school or you can be a single mom looking to pay the bills.  No matter what you situation, there are different grants that are designed to give you the relief that you need.

Because people come from a variety of diverse backgrounds, the government does recognize the need to help give certain groups more economic support and financing.  For this reason you should look at the different grants that are available from the government and see if you can qualify for any grants that are available.  People who are interested in finding a good grant from the government need to make sure that they do their homework before they apply for a grant.

There are many different reasons why you should consider applying for a government grant.  The most common reason why people apply for grants from the government is because they don’t have to repay the money.  The reason why government grants for individuals are so popular is because once you are accepted for the grant, you don’t have to worry about having to repay the loan.

This differs substantially from traditional loans that people look for.  If you were to go to the bank and ask for a loan, they would want a detailed report on your income, credit rating, and previous debts to see if you qualify.  Most grants that are offered from the government are designed to give low income and minorities are chance to improve their social level.

For this reasons you should look to apply for  grants that can help you get further education or skilled training in certain occupations.  These grants are offered from variety of different agencies that are meant to promote education and skill training.

The federal government recognizes the need for education among our workers and our youth.  This is why it is important that you apply for a government grant if you are thinking about attending any kind of training or schooling.  This will help you get on the career path that is right for you.

Remember that there are thousands of different grants that are offered from the government.  The only thing that you can lose is not applying for grant money.  It is in your best interested to do your research and find a good free government grants that are available online.  Because you don’t have to repay grant money it is essential that you apply for as money federal grants as you possibly can.

Given the current economic climate, it is no surprise that it is getting more difficult for people to purchase their own homes.  With the crash of the housing market, there was a big change in the market for first time home buyers.  No longer can you just walk into a bank with a bad credit rating and no down payment and get loan approval.  Fortunately, if you are looking for some additional sources of financing for your loan government grants for first time home buyers is a perfect way to get started to buying your first home.

When it comes to borrowing money, the best kind of money you can get is the kind that you don’t have to repay.  This is why government home owner grants are so useful.  The purpose of this grant is to help people get into their first home.  Once you get the government grant you don’t have to worry about making monthly payments on the loan.  The only down side about these grants is that if you have previously owned a home then you don’t qualify for the grants.

Before getting approval for a first time home owner grant from the government you will need to ensure that you have a good enough credit rating to get approval from a lending establishment.  Because the government grants only cover a certain portion of the cost of your home, you will need to ensure that you are able to secure financing for your home.  People who apply for the grant after traditional creditors have declined their loan will usually get rejected.  The government grant is designed to help alleviate some of the costs of purchasing the home.

If you are looking to apply for a government grant then you should look at different mortgage brokers that are available to give you information regarding grants.  You will need to complete an online application for pre-approval.  Depending on the area that you live in there may be different people who are administering the grant in your area.  Once you get granted pre-approval, you can then get an appointment with someone who deals with government grants in your area.

Government grants for first time home buyers are the perfect way to get some additional funding for your home purchase.  These grants are very useful because you don’t have to repay them if you live in the home you purchase.  If you are looking into buying a home for the first time then you should definitely apply for a grant from the government and see if you get approved.