Is A Historic Home Right For You? Part II

By
Real Estate Broker/Owner with RED Properties NC #129285

In Is A Historic Home Right For You? Part I we reviewed what the definition of a Historic Home is as well as some resources available in finding a historic home.  In Is A Historic Home Right For You?  Part II I thought it would be beneficial to understand the Financial Assistance that is available for purchasing a historic home in addition to exploring incentives that are available for restoring a historic home.

One huge incentive for purchasing a historic property comes in the form of a Tax Credit.  It is extremely important to note here that each state varies with their requirements for a tax credit in what it can be used for and also the amount!  For the purpose of this post I will be applying the requirements and nuances specific to North Carolina for residential properties.  There are additional guidlines for commercial buildings, income-producing properties and unique properties such as restoring mills and lighthouses.

Tax Credits:  North Carolina offers a 30% tax credit for qualifying rehabilitations for non-income producing properties that are to be utilized for personal residence.  Please note that a home must be listed on the National Register for it to receive the credit.  A homeowner may start work prior to the inclusion on the National Register but there must be evidence of intent to have the home listed on the National Register.  It is strongly advised that homeowners secure the listing on the National Register before claiming the credit.  There is no equivalent Federal Tax Credit for such rehabilitations, however there are Preservation Easements.

Preservation Easements:  While the exact definition of a Preservation Easement will be discussed in Part III it is relavent to mention here that there is a Federal Tax Credit available for Preservation Easements which are in addition to the State Tax Credits.   (Again, this is specific to North Carolina)

FHA Streamlined 203(k) Limited Repair Program:  Another disclaimer for you - I AM NOT A MORTGAGE PROFESSIONAL!  However, I can relay the information as I know it and for further details you should consult a mortgage professional.  The FHA Streamlined 203(k) Limited Repair Program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home prior to move-in.  In addition to the Streamlined 203(k) there is the FHA 203(k) which is much more detailed and has more nuances, twists and turns than this post will permit.  For more information I suggest that you visit U.S. Department of Housing and Urban Development AND consult a mortgage professional.

By no means does this post encompass all that is available to an individual that wishes to purchase and restore or maintain a historic property.  For more information I would suggest that you visit the following sites:

Thanks for following along and I hope that the information I have provided will assist you in your research.  If you are interested in purchasing a historic home in my area I would be delighted to help you navigate the path to finding the right home and exploring the options that are available to you! 

Is a Historic Home Right For You?  Part III will be coming soon and I will be detailing how to get your historic home certified as well as defining a Preservation Easement and what it means to you.

Historic opportunities are abundant in My Back Yard....

PS - The home picture used in this post is one of my favorites.  The owner has graciously allowed me to visit him this evening to interview him regarding the property's history and take pictures.  It will be very exciting and I can't wait to share it all with you!

 

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 RED Properties RaleighRed
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Tags:
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Leesa, I'm putting you down as my new historic home expert. While the tax law benefits vary by state like you said there are many advantages toward focusing on this category of home over traditional homes. You selected "another" beauty for your highlighted photo. It's gorgeous!!

Jun 14, 2008 04:13 AM #1
Ambassador
3,075,864
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Leesa:  Historic homes must also be kept up.  Paint must be in good condtion, yard maintenance etc.  Otherwise local government can fine you.  Probably washes the tax benefit for some people, though certainly not most.

Jun 14, 2008 04:51 AM #2
Rainmaker
635,243
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Gary - Thanks so much!  There is so much involved when purchasing a historic home and I don't mean that they are bad things.  Just so many options available!  Also, I can't wait to see the house tonight - it is incredible from the street!

Chris Ann - You are correct!  I will be touching on the maintaining of a historic home in a later post - I hope you stop by again!

Jun 14, 2008 06:11 AM #3
Rainer
215,890
Gail MacMillan
Titusville, FL

Hi Leesa - Thanks for such an interesting post.  I love the house you pictured above.  I'd like to ask a somewhat hypothetical question.  If this home were to go on the market in it's current condition, what would it most probably sell for?....and if it did need restoration, setting aside grants and such, what might it then sell for?  I don't think I'm moving to Wake Forest, but I'm really attracted to that house :-)

Jun 17, 2008 12:16 PM #4
Rainmaker
635,243
Leesa Finley
RED Properties - Wake Forest, NC
RED Properties - Raleigh NC Real Estate

Hans off, Gail - this one is mine.  It is a gorgeous home isn't it?  I didn't get to go in yet as the owner had to go out of town.  Coincidently, this home IS for sale.  $750,000.  He is currently a FSBO but understands that I am doing research on all of the historic homes in the area.  Of course, I would love to talk to him about selling it as well.

Jun 20, 2008 12:38 PM #5
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Leesa Finley

RED Properties - Raleigh NC Real Estate
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