What to Do When You Can't Afford a Home Repair

Geoff Williams

If you had to have your furnace or pipes fixed after that recent cold snap, you aren't alone. According to a study last year by the Joint Center for Housing Studies at Harvard University, approximately $300 billion is spent on home remodeling and maintenance every year in the United States.

That number should be even higher, though. Plenty of repairs go unfixed every year.

According to another 2013 study, this one from the National Center for Healthy Housing, 35 million metropolitan homes in the United States, or 40 percent, contain one or more health and safety hazards. The most common repairs that aren't fixed? Water leaks from outside, which affect 11 percent of metro-area homes, followed by openings in homes that mice are able to exploit (10 percent) and interior water leaks (9 percent). Meanwhile, 5 percent of homes throughout cities and suburbs have unrepaired roofing problems, damaged interior walls and foundation problems.

So what happens when you have a home issue that needs attention but lack the funds to repair it? You can do nothing, of course, and live with your problem. But there may be more options available than you think.

[Read: 7 Home Improvements That Will Save You Money This Winter.]

Apply for a loan. You may scoff at first, especially if your credit is shaky or you've already been turned down for a loan by your bank, but there are nonprofits out there that are designed to help low-income and middle-class homeowners, says Douglas Robinson, a spokesperson for NeighborWorks, a nonprofit created by Congress that supports community development in the United States.

"There aren't billions of dollars out there, but there are millions of dollars out there," Robinson says.

These loans generally fund nonglamorous but crucial infrastructure repairs to your home. In other words, you'll have much more luck finding money to repair your roof, replace your furnace or improve your ventilation than finding funding for a new oven or refrigerator.

NeighborWorks itself doesn't dole out loans, but you can find loans in its network of housing organizations, like Homewise Inc. in Santa Fe, N.M., Neighborhood Housing Services of Greater Cleveland and 233 other independent nonprofits serving 4,500 communities throughout the United States.

On NeighborWorks' website, www.nw.org, you can go to the right side of the screen and click on "Find a NeighborWorks Organization," which will bring you to a page where you can type in your state or ZIP code and search for nonprofits that may have loans available.

[Read: 5 Home Improvements That Are Worth the Cost.]

Robinson also suggests tracking down your local community development financial institution and seeking its advice and possibly financial assistance. "They're all around the country, and not everyone will qualify, but if we're talking about something that isn't dire and you have time to do your homework, it's probably a good way to go," Robinson says. You can find community development financial institutions at ofn.org/cdfi-locator.

If your income is at poverty level (generally, a family of four living off $23,050 or less is considered to be living on or below the poverty line), there is another organization worth knowing about: Rebuilding Together (rebuildingtogether.org), which specializes in repairing the homes of low-income people. (Finding a local Rebuilding Together chapter through the website can be challenging; you're probably better off running a search for "Rebuilding Together" and your location.)

Refinance. Specifically, with a Federal Housing Administration 203k refinance loan. These are loans in which the homeowner consolidates their existing mortgage and the cost of a home renovation project.

As long as the repairs are considered necessary (like a new floor) and not frivolous (like a new deck) and they will add value to your home, you may have a good shot at getting the loan. Your local mortgage lender can help you apply.

See if you're eligible for a grant. Yes, free money. And, yes, good luck with that. But grants, even if they aren't plentiful, are out there.

For instance, Stephanie Irto, a broker and Realtor at Equity Builders Home Financing and Real Estate in Los Angeles, notes that if you live in the flight path of Los Angeles International Airport, there is currently a program in which property owners can apply for approximately $30,000 worth of work, including projects like the installation of sound-deadening, double-wall modifications (no surprise, given where the home is located), electrical service panel upgrades, fireplace and chimney modifications and installation of a heating, ventilation and air-conditioning system.

Some cities, like Detroit and Tucson, Ariz., have even held occasional lotteries, in which residents can put in an application for a grant for a home repair and hope their name is selected. These lotteries are rare, but it's worth keeping an eye out for them.

The U.S. Department of Agriculture has what it calls the Very Low-Income Housing Repair program, which provides loans and grants to homeowners to repair, improve or modernize their homes. The department also offers the Rural Housing Repair and Rehabilitation Grant, which is available to homeowners 62 and older; funds may be used for repairs to improve health, safety or make the home accessible for a resident with disabilities.

[See: 10 Ways Your Home Can Pay You Money.]

As you can imagine, the best way to find out about these grants is to search online and see what you come up with, or talk to someone in your community who might be in the know at a local housing nonprofit, the chamber of commerce, your bank or your local Department of Housing and Urban Development office. People at the HUD offices may be able to direct you to an agency or nonprofit that can help - or they may be able to help you get a community development block grant, money that goes toward everything from affordable housing to home repairs.

But whatever you do, "Try not to make a rash decision about how you're going to finance your repairs," Robinson urges.

That's sometimes easier said than done. If you don't have a working heater and a polar vortex is staring you in the face, a high-interest loan may start to look pretty appealing. But if you're in a situation where you have some time before a home repair becomes an emergency, utilize that time to organize a posse to search for money. There is home repair help out there - somewhere.