Senior Mom Needs Home Improvement Funds

Dear Dr. Don,

My 84-year-old mother needs some repairs done to her home. She owns her home outright, valued at around $70,000. Should she think about a reverse mortgage or a home equity loan? She is on a fixed income with no savings available to use. What would be her best option?


-Linda Lenders

Dear Linda,

A conventional home equity loan can be difficult to get for an 84-year-old living on a fixed income. That's even if her home is paid off. A reverse mortgage can free up funds, but many have high closing costs.

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While you didn't provide the estimated cost of the needed home repairs, spending thousands to finance thousands in home repairs seems a bit unwise.

I'd suggest that your mother look into a Title I Home Improvement Loan. The Federal Housing Administration loan program insures loans to finance light or moderate rehabilitation of properties, as well as construction of nonresidential buildings. The program can insure loans for up to 20 years on either single or multifamily properties. The maximum loan amount is $25,000 for improving a single-family home or for improving or building a nonresidential structure.

She can talk to a Department of Housing and Urban Development housing counselor to learn more about the Title I program and expected costs associated with the loan. The counselor can also discuss home equity conversion mortgage costs and options.

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