Free Home Improvement Grants for Low-Income Families

Low-income families find it challenging to find free home improvement grants because the funding is limited for projects that increase property values, such as additions and remodeling.

Often the words we choose have profound implications.

Free government money is more readily available to help homeowners repair or replace failing elements such as foundations, roofs, and other critical components.

Nevertheless, every rule has exceptions, and you can find several by examining each federal grant program. Trace the flow of federal money to state and county-level organizations.

Finally, you can find additional opportunities by attacking the problem from angles unique to senior citizens, disabled people, single mothers, and cancer patients.  

Government Grants for Home Improvement

United States government grants for home improvement do not flow directly to low-income families. Instead, the free federal money trickles down to state and local agencies, non-profit organizations, and federally recognized tribes.

Also, home repair assistance programs for low-income families are often more feasible because fixing up a residence costs far less and does not increase property values.

State Grants

State government grants for home improvement are easier to find because you begin one step closer to the local agency that might provide financial assistance to your low-income family.

Since all free government money flows from federal agencies to state organizations, publishing a comprehensive listing organized for homeowners would be great. Fortunately, (HUD) maintains an online resource. 

Find assistance programs in your state here.

Federal Grants

The federal government does not offer home improvement grants directly to low-income homeowners. It is more likely to provide financial help with repairs because increasing property values alone is rarely an objective.

WAP Grants

The federal government offers home improvement grants through its Weatherization Assistance Program (WAP) for energy efficiency projects.

Sponsored by the US Department of Energy (DOE), WAP might support various energy-saving upgrades free to the homeowner.

HUD Grants

The US Department of Housing and Urban Development (HUD) does not provide grants for home improvement. Instead, they insure lenders against most losses on loans that finance property improvements.

Home improvement loans with bad credit are easier to obtain, thanks to the HUD lender insurance program. The issuing banks are more likely to approve an applicant when the federal government agrees to assume 90% of the responsibility when low-income families become delinquent on their obligations.

However, the HUD program is not providing free assistance. Expect the issuing bank to charge you an insurance premium of $1 per $100 advanced each year. For instance, the premium surcharge on a $10,000 loan equates to $100 annually.

USDA Grants

The US Department of Agriculture (USDA) supports two home improvement assistance grants for low-income families living in rural areas (population under 20,000 people).

Housing Preservation

The USDA Housing Preservation Grant provides free money to sponsoring organizations to repair or rehabilitate residences owned or occupied by very low-income rural citizens. However, the program is closed to applicants.

The sponsoring organizations can use the funding for specific expenses.

  • Handicap accessibility features
  • Repair or replace existing elements
    • Electrical wiring
    • Foundations
    • Roofs
    • Insulation
    • Heating systems
    • Wastewater disposal
Section 504

The USDA Section 504 Home Improvement Grants provide free money to elderly very-low-income homeowners to remove health and safety hazards.

To qualify, the adult age 62 or older must meet these criteria.

  • Be the homeowner and occupy the residence
  • Reside in an eligible rural area
  • Unable to obtain a loan elsewhere (bad credit)
  • Have a family income below 50% of the area median
  • Unable to repay a restoration loan

VA Grants

The US Department of Veterans Affairs (VA) offers several home improvement grants to help personnel with service-connected disabilities. The funding helps make needed changes to their living environment, such as ramps, walkways, handrails, grab bars, sliding doors, and other modifications.

  1. Specially Adapted Housing (SAH) grant helps recipients live independently in a barrier-free environment
  2. Special Housing Adaptation (SHA) grant helps recipients with specific service-connected disabilities adapt or purchase a residence to accommodate the impairment
  3. Temporary Residence Adaptation (TRA) grant helps recipients modify a house owned by a family member
  4. Home Improvement and Structural Alterations (HISA) grant provides medically necessary improvements and structural alterations to primary residences

IRS Grants

The federal government offers home improvement grants through the tax code published by the Internal Revenue Service (IRS). Homeowners have three possible avenues to access this free money.

  • Capital improvements add to the cost basis of your property, minimizing capital gains taxes when you sell your residence in the future
  • People taking the home-office deduction can expense a portion of repairs and depreciate improvements over time
  • Modifications prescribed by a licensed physician count as deductible medical and dental expenses

Keep all receipts from your contractor and provide them to your certified public accountant come tax season to take full advantage.

Who Is Eligible

There is no single correct answer to who is eligible for government home improvement grants as many agencies offer programs with different criteria, and creative approaches can surface untapped opportunities.

Low-income families most frequently qualify (see the next section) based on where they fall under the federal poverty guidelines, which have two primary components.

  1. Your Modified Adjusted Gross Income
  2. The number of household members

Then, specific programs might have unique acceptance rules for people fitting into protected classes such as the elderly, veterans, and homeowners with energy inefficiencies.  

Low-Income Home Improvement Grants

Low-income families can sometimes find free home improvement grants by approaching the problem differently. Instead of searching for direct assistance from the government, you might discover indirect sources of help specific to marginalized groups. 

Senior Citizens

Home improvement grants for senior citizens encompass each government program for low-income families noted above, plus related benefits for elderly adults over specific ages.

  1. Free government money for seniors over 50 can cut other expenses, allowing you to devote more fixed retirement income to remodeling projects. Leave no stone unturned when seeking assistance.
  2. Seniors can also deduct the cost of Medicare premiums as a qualifying medical or dental expense. The tax code does not allow any savings until you eclipse the 7.5% Adjusted Gross Income (AGI) threshold.
  3. Seniors exclusively qualify for the Section 504 grants as you must be at least 62 years old to be eligible for free money that you do not have to repay. Most others get a loan instead.

Disabled People

Three additional disguised grants can provide financial help for low-income disabled people with medically necessary home improvements. Please work with your physician to draft a letter of medical necessity and submit it to the proper authority.

Loans

Personal loans for people on disability benefits have grant-like characteristics for home improvement projects and other uses. While you can only borrow tiny sums, lenders face restrictions should you default in the future.

Lenders cannot garnish Social Security disability checks should you fall behind on payments. Also, because personal loans are unsecured, you cannot lose your home through foreclosure. 

Insurance

Private health insurance, Medicaid, and Medicare will sometimes offer financial help for disabled individuals with medically necessary home modifications that support function, health, and mobility.

For instance, a disabled person could get free money from one of these insurance programs if their doctor prescribes walk-in tubs to prevent falls or wheelchair ramps, enhancing mobility.

Submit the letter of medical necessity to the insurance company for preapproval.

Healthcare FSA

Flexible Spending Accounts (FSA) can provide financial assistance for disabled people with home improvements prescribed by a licensed physician. A healthcare FSA allows you to use pre-tax dollars to pay for qualified expenses.

Flooring financing with no credit check is a hidden benefit of paying for the project using an FSA. Your employer must immediately reimburse all qualifying expenses and cannot pull a copy of your consumer report. The installation of rigid flooring to enhance mobility might be eligible.

Send the letter of medical necessity to the FSA administrator for preapproval.

Single Mothers

Home improvement grants for single mothers also include each government program for low-income families noted above, plus related benefits for women raising children by themselves.

Government help for single mothers with no income does not require repayment, freeing up resources for remodeling projects. Tap into every possible benefit when feeding and clothing children all alone.

  • Temporary Assistance for Needy Families (TANF)
  • Supplemental Nutrition Assistance (Food Stamps)
  • Medicaid Health Insurance
  • Children’s Health Insurance Plan (CHIP)
  • Low Income Home Energy Assistance Program (LIHEAP)
  • Women Infants & Children (WIC)
  • Child Care Assistance Programs (CCAP)

Cancer Patients

In addition to the other resources noted above, cancer patients can find home improvement grants hidden inside two different parts of the IRS tax code and Medicaid. 

First, Medicaid could be free insurance for cancer patients that also pays for modifications prescribed by your oncologist. A letter of medical necessity is the key to unlocking these possible benefits. Changes needed to maintain a sterile environment could be eligible, especially when immunocompromised.

Second, cancer patients’ unreimbursed medical expenses for travel, radiation and chemotherapy, and other treatments boost the size of their tax refund. Unless your total itemized deductions exceed the standard deduction, you do not realize any savings.

  1. Charitable Donations
  2. Mortgage Interest & PMI Premiums
  3. State & Local Property Taxes
  4. Casualty & Theft Losses
  5. Unreimbursed Medical & Dental Expenses above 7.5% of AGI

Third, cancer patients can sometimes deduct home improvement prescribed by a doctor as a medical expense. For example, those immunocompromised by chemotherapy might need to replace germ-infested carpeting with vinyl flooring someone can disinfect with a mop.