How to Pay for Emergency Home Repairs

broken pipe that requires emergency home repair

Sixty-five percent of U.S. homeowners reported that their house needed repairs to make it safe or resolve damage, according to a NerdWallet survey. There are a number of reasons your home may need major, unexpected repairs. Maybe there was a natural disaster, such as a wildfire or hurricane. Or it might just be the result of putting off a maintenance task for too long. As an example, most people don’t think about the roof over their heads, until it springs a leak.

There is one major barrier that stands in the way of a much needed home repair: cost. Nearly half of respondents in the NerdWallet survey cited “cost” as an obstacle. Those who selected “cost” also said they would need an additional $7,370 (on average), in order to make the repair.

If you’ve found yourself in the same position, here are some ways to pay for emergency home repairs.

Homeowners Insurance

Your homeowners insurance provides financial protection for your home in case of disasters, theft or accidents. If you have a mortgage, your lender likely required you to get homeowners insurance at the beginning of the process. One type of coverage underneath homeowners insurance is dwelling coverage. It covers the cost of repairing or rebuilding your home if it’s damaged or destroyed by a hurricane, fire or another disaster specifically listed in your policy. What type of damage might it cover? Some examples include roofing, walls, floors, plumbing, or anything built into the home (up to your policy limit).

Home Equity Line of Credit

Another option to pay for emergency home repairs is getting a home equity line of credit (HELOC). This type of home equity loan lets you take out funds as needed and pay back the money at a variable interest rate. There are generally low to no closing costs. As of May 2021, rates ranged between 2.62 percent and 21 percent. What determines your rate? There are a number of factors, including your credit. To get the best rate possible, you’ll need a high credit score, a low debt-to-income ratio and a lot of equity in your home, according to Bankrate.

Government Assistance

Property Improvement loans are another consideration for those who need help covering an emergency home repair. Title I Property Improvement Loans are offered by private lenders and backed by the U.S. Department of Housing and Urban Development (HUD). HUD does not actually lend the money for the property improvements. It simply ensures that private lenders are protected against loss on property improvement loans they make. Borrowers must have the ability to repay the loan in regular monthly payments. Once approved, you can use the loan to finance alterations, repairs and improvements for a home, including a manufactured home, that has been occupied for at least 90 days. Property owners can apply at any lender (bank, mortgage company, savings and loan association, or credit union) that is approved to make Title I loans. Beware of deceptive home improvement contractors, HUD advises.

This loan can also be used in tandem with the 203(k) Rehabilitation Mortgage Insurance. The Federal Housing Administration (FHA) offers both a limited 203(k) mortgage and a 203(k) mortgage. The limited option allows homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve or upgrade their home. If you qualify, this money would allow you to quickly tap into cash to pay for emergency home repairs.

Section 203(k) insurance lets homebuyers and homeowners finance the purchase — or refinancing — of a house and cost of its rehabilitation through a single mortgage or to finance the rehabilitation of an existing home.

Some of the eligible activities, according to HUD, include:

  • Structural alterations and reconstruction
  • Reconditioning or replacing plumbing; installing a well and/or septic system
  • Adding or replacing roofing, gutters and downspouts
  • Adding or replacing floors and/or floor treatments

To be financed under this program, your property must meet basic energy efficiency and structural standards.

Applications can be submitted directly to an FHA-approved lender. You can start the search for a lender on hud.gov.

Disaster Relief

A number of organizations make it their mission to provide financial support to families who are the victims of a disaster. The Federal Emergency Management Agency (FEMA) is one of those organizations. It offers an Individuals and Households Program, which can provide funds to support the repair or replacement of owner-occupied homes. This type of assistance is intended to meet basic needs and supplement disaster recovery efforts. It is not a substitute for insurance and doesn’t cover all expenses associated with the disaster.

There are four steps you must complete to apply for assistance, including:

  1. Take photos of your damaged home and belongings.
  2. Make a list of damaged, lost items.
  3. File a claim with your insurance company. If you don’t have insurance, skip to Step 4.
  4. Apply for FEMA assistance online, by phone or in person.

The Cost of Emergency Home Repairs

The cost of an emergency home repair can vary greatly depending on the nature of the issue and the professional you hire to fix it. Since there is no “fixed” price for each problem, it’s wise to request quotes from several licensed professionals and compare costs.

Some of the most expensive repairs tend to be structural. Here are some examples of major repairs and how much you might expect to pay for them, according to realtor.com:

  • Upward of $100,000 for an extensive foundation fix
  • $4,000 to $10,000 for a smaller repair to a foundation wall
  • $3,000 per system or $10,000-plus to replace your whole-house heating or cooling system (depending upon how complicated it is to replace)
  • $1,500 to $6,000 for water-damaged walls or ceilings

Before choosing a professional, read their online reviews (especially on Google My Business, Angie’s List and Yelp) and check the Better Business Bureau to see how many complaints have been filed and resolved.

Alternative to Paying for Emergency Home Repairs

Sometimes, the cost of an emergency home repair is just too much to bear. Don’t worry — there’s an alternative. Avoid the burden of an emergency home repair by selling your property to a homebuying company, such as The Buy Guys.

We pay cash for houses “as is” in Florida, Georgia and Alabama. That means we buy them in any condition. If we’re able to make you an offer, you don’t have to make any repairs to the property to sell it. Additionally, the virtual process is quick and easy. Typically, the entire process from a signed contract to cash in hand can be as quick as five days.

To find out how much your home is worth, give us a call at (888) 204-7603 and get a free estimate in minutes.

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