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Financing A Historic Home | Mortgage 101

Posted on 12/01/2020 to Researching Your Home

Real Estate For Sale

Aside from your standard things to consider when you are considering the purchase of a historic property is the financing.  Financing can present some challenges, so it is important to talk to your mortgage lender. 

Certain banks may require additional loan guarantees for older homes. If you are applying for a VA or FHA loan, make sure that the home meets their specified criteria—you might run into a problem if the home needs extensive repairs or has a structural issue.

That being said, you may qualify for two FHA programs: the Limited 203(k) loan and the Title 1 Property Improvement loan. With a 203(K) loan, you can finance up to $35,000 for repairs or home improvements and your project must cost at least $5,000. Repairs need to be completed within six months. With a Title 1 loan, you can borrow an unsecured amount of $7,500 for smaller repairs; the maximum amount you can borrow is $25,000.

The property appraisal may also look at whether the home is stigmatized. A house connected to a beloved historical figure will have a higher market value than one connected with someone infamous. A “haunted” house could possibly be a trophy property as there can be a market for homes with a bad reputation.  As crazy as that sounds, it's true.  

Bottom line, make sure you look into your finance options and how it can affect your plans when making the historic home purchase.  Knowing these types of things will make a difference in some of your choices and help give you the knowledge of what you're getting into.

If you are looking to buy, sell, or have any questions regarding Miami Historic Homes, call 305-986-7041 or fill out the contact form. We would love to connect with you regarding your interest in Historic homes and we specialize in renovating, researching, purchasing or selling Historic Homes in South Florida.

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