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:
- National Trust For Historic Preservation
- The National Historic Preservation Program
- North Carolina State Historic Preservation Office
- List of State Historic Preservation Offices
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!