Worried about emergency home repairs? – 7 ways to pay for them with ease

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A recently carried out survey by HomeServe USA revealed that as many as 25% of all homeowners never save money for major home repairs. What more, almost half of all homeowners, 48% to be precise, have had to cough up money for some or other emergency home repair during the last 12 months!


Buying a home is easily one of the biggest investment decisions you can ever make. Yet, a good number of people pay no heed to the costs that come with such purchases. Very often people jump into mortgages without thinking about the costs of maintaining and caring for their most expensive asset.

When you’re the homeowner, you just can’t call up some landlord when your water heater goes on the fritz!

The onus of fixing it lies with you.

And postponing any important repairs or maintenance tasks like this can deteriorate the problem/s even further, often resulting in costlier problems later on, not to forget the depletion of your property’s market value. This is why planning for such emergency home repairs is extremely important.

Let’s take you through 7 ways in which you can pay for such expenses with ease:

Through your credit card

The most obvious way for a large majority of Americans, their first instinct whenever they are faced with such emergency home repair problems is to tap the plastic and get done with it! However, think again! Do you have enough credit available to meet such expenses? If yes, great! Even better if your credit card has a low APR and you’re a pretty disciplined credit card user.

On the other hand, if your credit card has a very steep interest rate, you might find yourself paying off this amount even when the next home disaster comes knocking your wallet!

Government help

You can make use of a federally insured mortgage product known as FHA 203(k) for repairing or rehabilitating a damaged home that you wish to make your primary residence. You can also use such loan for purchase of new furnace, air conditioner or roof for your home. The Limited 203(k) loan program on the other hand can be used for buying or refinancing a property, wherein extra funds are added to the loan product for meeting upgradation and/or repair expenses.

Furthermore, you can also use Title I Property Improvement Loan Program of HUD (the US Department of Housing and Urban Development) for meeting your home repair needs. Such Title I loans are basically FHA (Federal Housing Administration)-insured loan products that are issued by the lending establishments, particularly to homeowners who don’t have much equity in their properties. The provided loan amount can be utilized for carrying out any major home repairs, or even on household items and appliances that can make your home a more inhabitable and useful one. However, please keep in mind that you can’t use such loans for purchasing luxury items or facilities like a hot bath tub or a swimming pool!

You may even seek help of USDA (US Department of Agriculture) for meeting such home repair expenses. The home repair program run under USDA Section 504 can be used by very low income households in rural areas of United States for carrying out home repairs, home improvements or modernization of their homes. Special grants can also be availed by homeowners who’re aged 62 years or more.

Homeowners insurance

Your home insurance policy should be among the first few things you must check whenever you’re faced with an emergency home repair need. For instance, your insurance policy may cover a part of your roof replacement cost if the same was damaged because of a storm. Although such damages may not be clearly visible to human eye, a qualified inspector (from the insurance company) will definitely be able to find them.

Home Equity Line of Credit (HELOC)

HELOC or Home Equity Line of Credit is a loan that lending establishments agree to extend, up to a certain maximum amount, for an agreed period of time, in which the borrower provides his/her equity in his/her home as the collateral.

So, if you have any equity in your home, you can use it effectively to avail such loan and carry out the needed emergency home repairs or any home improvement tasks. However, please keep in mind that since HELOC is a loan product that’s backed by your home, using it unwisely or failing to repay it as per schedule can lead to severe consequences.

Disaster relief funds

In case your need for emergency home repairs is directly because of some natural disaster, you can seek help of relief organizations like FEMA (Federal Emergency Management Agency) or the Red Cross to obtain funds for such tasks. FEMA normally provides funds for any emergency repairs that aren’t covered by the regular homeowners insurance. However, please keep in mind that this money can only be used for carrying out major repairs necessary for sanitary needs or for creating safe living conditions, and not for restoring your home to its original pre-disaster condition.

Community development programs

Normally administered by agencies, financial institutions and local or state governments, community development programs can be effectively used for fulfilling your emergency home repair requirements. For instance, municipalities make frequent use of HUD’s Community Development Block Grants for providing emergency repair grants and loans to the local inhabitants.

Please note, there may be restrictions related to the eligibility for such programs, for instance, the income limit of the applicant being 80% of the median income of people in that area. Homeowners can also use other kinds of assistance plans targeted at disabled or senior homeowners. The best way to go about all such plans/programs is to check with the local housing authority, housing services, Office of Housing or an agency of a similar name, for more details.

Cash out refinance

A cash out refinance is a mortgage refinancing transaction wherein you increase your total mortgage amount and incur an additional expense in terms of the loan settlement costs. Its main purpose is to help you tap into your equity in your home. The applicable rates are normally lower than regular home equity loans. The borrowed money can be used for carrying out emergency home repairs, home improvements and meeting other financial goals. You must use this option only as a last resort.


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