Advice Topics
- Buying (205)
- Selling (215)
- Renting (41)
- Market News & Trends (12)
- Finance & Legal Info (97)
- Tips & Advice (98)
- Working With an Agent (54)
- Marketing (4)
- Investing (16)
- Affordable Housing (18)
- Green Housing (2)
- Schools (1)
- Remodeling (32)
- International Real Estate (8)
- Terms & Definitions (27)
- Home Loans (15)
Top Contributors (View All)
Find a Top Real Estate Agent Near You
How to renovate a house with bad credit?
I got my mother's estate,needs renovations, owe 10,000 and I have bad credit. What can I do to fix it?
Asked By Laura White | Talladega, AL | 1341 views | Remodeling | Created 4 months ago
Answer(5)
Amanda Courtney
REP Realty Group
You can explore FHA 203(k) or HomeStyle Renovation loans, which combine the purchase and renovation into one mortgage. Partnering with a skilled lender and experienced agent can make the process smooth even with less-than-perfect credit.
- 1 month ago
Helpful (0)
Unhelpful (0)
Jason Craig
Coldwell Banker
Renovating a home when you have limited cash and a low credit score can be challenging, but there are programs designed to help. Here are a few avenues to explore:
• **Government‑insured renovation loans** – HUD’s Title 1 Property Improvement loan and the FHA **203(k) rehabilitation mortgage** allow homeowners to roll renovation costs into a mortgage. The 203(k) program, for example, lets you finance up to about $35,000 for repairs and improvements as part of your loan. Because the loans are insured by the federal government, lenders are often more flexible on credit scores than with standard unsecured personal loans.
• **USDA Section 504 Home Repair loans and grants** – If the property is in a rural area and you are low‑income, the U.S. Department of Agriculture offers 20‑year loans at about 1% interest and grants for homeowners aged 62 or older to fix health and safety hazards. You must occupy the home, have income below the county‑specific limit and be unable to obtain affordable credit elsewhere.
• **State and local assistance** – Many cities and counties have housing or community development departments that offer home repair grants or forgivable loans for owner‑occupied properties, especially for seniors or low‑income households. Contact your local housing authority or a HUD‑approved housing counselor to learn what is available in your area.
• **Tap existing equity or sell as is** – If your mother’s house has some equity, a home equity line of credit or cash‑out refinance might be possible, though credit scores still matter. Another option, if the repairs are extensive, is to sell the property to an investor or an owner‑occupant who is willing to take on the work; that allows you to use the sale proceeds to pay off the $10,000 lien and start fresh.
Finally, work on improving your credit so you have more financing options. Paying existing debts on time, reducing credit balances and checking your credit report for errors will gradually raise your score. A nonprofit credit counselor or HUD‑approved housing counselor can help you build a plan and discuss which renovation loan programs you may qualify for.
• **Government‑insured renovation loans** – HUD’s Title 1 Property Improvement loan and the FHA **203(k) rehabilitation mortgage** allow homeowners to roll renovation costs into a mortgage. The 203(k) program, for example, lets you finance up to about $35,000 for repairs and improvements as part of your loan. Because the loans are insured by the federal government, lenders are often more flexible on credit scores than with standard unsecured personal loans.
• **USDA Section 504 Home Repair loans and grants** – If the property is in a rural area and you are low‑income, the U.S. Department of Agriculture offers 20‑year loans at about 1% interest and grants for homeowners aged 62 or older to fix health and safety hazards. You must occupy the home, have income below the county‑specific limit and be unable to obtain affordable credit elsewhere.
• **State and local assistance** – Many cities and counties have housing or community development departments that offer home repair grants or forgivable loans for owner‑occupied properties, especially for seniors or low‑income households. Contact your local housing authority or a HUD‑approved housing counselor to learn what is available in your area.
• **Tap existing equity or sell as is** – If your mother’s house has some equity, a home equity line of credit or cash‑out refinance might be possible, though credit scores still matter. Another option, if the repairs are extensive, is to sell the property to an investor or an owner‑occupant who is willing to take on the work; that allows you to use the sale proceeds to pay off the $10,000 lien and start fresh.
Finally, work on improving your credit so you have more financing options. Paying existing debts on time, reducing credit balances and checking your credit report for errors will gradually raise your score. A nonprofit credit counselor or HUD‑approved housing counselor can help you build a plan and discuss which renovation loan programs you may qualify for.
- 2 weeks ago
- Helpful (0)
- Unhelpful (0)
Are you ready to find a top agent near you?
Browse profiles of the highest ranked agents in your area and find one that meets your specific needs.
Devin Kroner
EXP, Northern Kentucky
First of all, I want to say—you’re not alone. Many people inherit homes that need work, and navigating repairs with limited funds or credit challenges can feel overwhelming. The good news? There are creative, real-world solutions to help you move forward, even in a tight spot.
Here are some options to consider:
🔨 1. Renovate Strategically, Not Fully
Instead of a full renovation, focus on high-impact, low-cost improvements that boost your home's value and appeal:
Paint: A fresh coat makes a massive difference.
Lighting & Fixtures: Updated fixtures feel modern and clean.
Curb Appeal: Landscaping and a clean entryway make a great first impression.
Deep Cleaning & Decluttering: It’s free and powerful.
If the home is structurally sound, these updates can help it shine without breaking the bank.
💸 2. Use Equity or Sell As-Is
Even if you owe $10,000, the home may have equity—especially in today’s market. Depending on the home's condition and local demand, we could look at:
Selling as-is to an investor or cash buyer who will handle repairs.
Listing with strategic improvements that don’t require full renovation.
Ask your agent to can help you determine what route gives you the most return and least stress.
🛠 3. Partner with a Renovation-Friendly Agent
That’s where your Trusted Advisor (AGENT) comes in. They will work with:
Local contractors who may offer deferred payment until closing.
Stagers and cleaners who work with tight budgets.
Vendors familiar with estate sales and credit-challenged situations.
Together, you and a good agent can create a custom plan—whether that means prepping for sale now, renting for income, or holding while you clean and fix it up in stages.
🤝 4. Creative Financing Options
Even with poor credit, there are possibilities:
Home improvement loans through community banks or credit unions
Private lenders or co-signers
Local grant programs for inherited or inherited-income homes (I can help research these)
Sell a portion of the equity to an investor and stay involved in the profit
Talk through your goals—whether it’s keeping the home, selling it for maximum return, or just getting out from under the weight of it, with your agent or a few agents to see who can best help you with your vision and needs!
Here are some options to consider:
🔨 1. Renovate Strategically, Not Fully
Instead of a full renovation, focus on high-impact, low-cost improvements that boost your home's value and appeal:
Paint: A fresh coat makes a massive difference.
Lighting & Fixtures: Updated fixtures feel modern and clean.
Curb Appeal: Landscaping and a clean entryway make a great first impression.
Deep Cleaning & Decluttering: It’s free and powerful.
If the home is structurally sound, these updates can help it shine without breaking the bank.
💸 2. Use Equity or Sell As-Is
Even if you owe $10,000, the home may have equity—especially in today’s market. Depending on the home's condition and local demand, we could look at:
Selling as-is to an investor or cash buyer who will handle repairs.
Listing with strategic improvements that don’t require full renovation.
Ask your agent to can help you determine what route gives you the most return and least stress.
🛠 3. Partner with a Renovation-Friendly Agent
That’s where your Trusted Advisor (AGENT) comes in. They will work with:
Local contractors who may offer deferred payment until closing.
Stagers and cleaners who work with tight budgets.
Vendors familiar with estate sales and credit-challenged situations.
Together, you and a good agent can create a custom plan—whether that means prepping for sale now, renting for income, or holding while you clean and fix it up in stages.
🤝 4. Creative Financing Options
Even with poor credit, there are possibilities:
Home improvement loans through community banks or credit unions
Private lenders or co-signers
Local grant programs for inherited or inherited-income homes (I can help research these)
Sell a portion of the equity to an investor and stay involved in the profit
Talk through your goals—whether it’s keeping the home, selling it for maximum return, or just getting out from under the weight of it, with your agent or a few agents to see who can best help you with your vision and needs!
- 3 months ago
- Helpful (0)
- Unhelpful (1)
Ashley Watters
EXP Realty
Pay down the $10,000 as quickly as possible. Prioritize on-time payments to rebuild credit. Consider selling small assets or picking up extra income. Look into local home repair grants. As your credit improves, you may qualify for better financing to renovate or refinance later.
- 4 months ago
- Helpful (0)
- Unhelpful (1)
Related Questions
-
Should I replace my hollow doors?
My house was built in 1934 but someone replaced all the the interior doors with hollow ones, not solid wood. It seems weird in this historic house. Is it worth my money to replace them all before selling? - Rick
- Asked by Richard Maddses
- Milwaukee, WI
- 969 views
- Remodeling
- Updated 2 years ago
-
What updates are worth it?
We're thinking of selling our condo. There are some things that are outdated or that could be updated. We don't want to waste our money on things that don't matter, but also want our condo to sell for the best possible price. So, what updates are worthwhile?
- Asked by Hudson A
- Denver, CO
- 1140 views
- Remodeling
- Updated 2 years ago