One of the biggest dilemmas you can face as a homeowner is the need for a major home repair job to be done. If you need a new roof but have bad credit, it can seem practically impossible to get a home improvement loan to pay for the work. Although this can seem challenging, it’s not impossible. Just like it’s possible to qualify for a home mortgage loan, you can be approved for a home improvement loan as well. To get your new roof, there are a variety of ways to secure the financing you need to pay your contractors. Of course, nothing comes easy and you will have to do a bit of research. Here are the best ways to get financing to pay for a new roof when you have bad credit.
Get Help From Non-Profit Organizations
If your living at the poverty line, there is a non- profit organization called Rebuilding Together (rebuildingtogether.org), that can help make repairs to homes owned by low-income people. Once you visit their website you will be able to locate your local Rebuilding Together Chapter and request help from their volunteers. With the combined effort from their corporate and community partners, this 40 year old organization and their 100,000 volunteers is able to complete around 10,000 rebuild projects across the nation each year.
Another nonprofit organization that works hard towards helping lower income and middle class homeowners is called NeighborWorks which maintains a comprehensive directory of housing organizations that can help with much needed repairs to homes. By going to the NeighborWorks website at (neighborworks.org/Our-Network/Network-Directory), you can check for nonprofit organizations in your area that offer help to those in need of home repairs by entering your state or zip code to conduct a search.
Get a Co-Signer for a Loan
If you have bad credit and desperately need a loan to make repairs to your roof or replace the roof altogether, you can get a co-signer. Having a co-signer with good to excellent credit greatly improves your chances of being able to secure a loan. Most people have a family member or close friend to serve as their co-signer. When this person signs onto the debt, it not only helps you to get a loan but gets you one with a lower interest rate.
Apply for a Refinance Loan
Although you might think twice about it because of your credit being bad, you might want to try applying for a loan. Even if your bank has turned you down in the past, you can try applying for a 203k refinance loan through the Federal Housing Administration (FHA has a much lower credit criteria than a traditional or conventional loan). This type of loan is only granted to homeowners who consolidate their existing mortgage and the costs of a home improvement project. The home repairs must be something necessary, such as replacing your roof, and not something frivolous like building a new deck. Additionally, the work must be something that will add value to the home. A mortgage lender can help you apply for a refinance loan.
Look Into Private Lenders
There are many private lenders that give homeowners who have bad credit an opportunity to secure a home improvement loan. These lenders are frequently willing to provide loans to individuals with bad credit because the money is going to be put to good use.
Check for Grant Eligibility
Look into obtaining a grant so you can pay for your replacement roof. It’s free money that may not be available on a widespread basis, but grants are out there. Certain cities, such as Detroit, Michigan and Tucson, Arizona, hold lotteries that allow homeowners to submit applications from a grant to make home repairs.
The USDA is another place to look at for grants. It offers the Very Low Income Housing Repair program, which provides grants and loans to homeowners to make necessary repairs to their homes. Another option to look into is the Rural Housing Repair and Rehabilitation Grant, which is available to people age 62 and over so they can make mandatory repairs to their homes.
Alternative Lending Options
Another avenue you can turn to is to look into alternative lending opportunities. It frequently involves informal lending practices like obtaining money from your peers. Also known as “micro-lending,” this option involves lenders giving a borrower a small amount of money.
On such lender is LendingPoint that can help you secure a loan with a credit score as low as 600. There you can get funded for a loan that can be used for a new roof with a interest rate of 15.49% – 34.99% with a loan amount ranging from $3,500 – $20,000.
These are good options for securing financing when you have bad credit. However, if you can wait at least a few months to secure financing, you might want to work on repairing your credit at least somewhat. It can improve your chances of successfully securing a loan so that you can repair or replace your roof.