Home Repair Programs for Bad Credit
Homeowners can sometimes undergo financial hardships that negatively affect credit scores, making them ineligible for home equity loans or traditional financing for home repairs. However, there are some options for homeowners with poor credit. Does this Spark an idea?
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Types
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Programs available for homeowners with poor credit are rare. The most commonly utilized options are U.S. Department of Agriculture grants and guaranteed loan programs or same-as-cash installment agreements with contractors. It is important to note that all programs may have qualifying guidelines or charge higher rates of interest to assume the risk of bad credit borrowers.
Considerations
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Home improvement grants are difficult to obtain. The USDA website specifies that homeowners must live in an approved area, and meet age and income qualifying guidelines. The same applies to guaranteed home improvement loans. However, many contractors will work out payment programs with bad credit borrowers, as the contractor can put a lien on a property if the buyer does not adhere to his payment arrangements.
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Misconceptions
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Many homeowners assume that their credit isn't up to par or bypass the opportunity to inquire about how to improve credit scores. Experienced loan counselors can provide a borrower with a plan on improving his credit and a time line for completion that can culminate in approval for a traditional home equity loan or line of credit to complete repairs.
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