Housing rehabilitation loan & grant programs

There is strong evidence that housing rehabilitation loan and grant programs enable housing improvements that result in health benefits, especially when improvements focus on increasing warmth through insulation and energy efficiency measures (Thomson 2015, Gibson 2011, Howden-Chapman 2007, NICE-Taske 2005). Housing improvements that increase warmth have shown consistently positive effects on respiratory outcomes, overall physical and mental health, and measures of well-being such as self-rated general health (Thomson 2015, Howden-Chapman 2007).

Housing improvements have also been shown to reduce children’s absences from school, adult absences from work, doctor’s visits, and hospitalizations (Thomson 2015, Howden-Chapman 2007). Housing rehabilitation projects that comply with green standards can also improve health outcomes such as asthma, sinusitis, and chronic bronchitis symptoms. Green standards require use of sustainable building products and design elements that reduce moisture, mold, pests, and radon, and improve air quality (Jacobs 2014, Breysse 2011). Building deficits such as inadequate heating and ventilation, lead paint, pest infestation, and safety hazards are associated with negative health outcomes such as serious injuries, chronic respiratory illnesses, poor mental health, and the spread of infectious diseases (Saegert 2003, Krieger 2002a). A recent study further supports the association between low quality, unsafe housing and a greater likelihood of suffering from compromised health (Boch 2020).

Programs that designate funds for families and individuals with low incomes can decrease disparities in access to quality housing and housing-related health outcomes (Jacobs 2014). Housing rehabilitation efforts in marginalized and declining neighborhoods may also have positive effects on neighborhood quality and stability (Smith 2011a, Helms 2012). A Milwaukee-based study suggests that housing rehabilitation can lead to appreciation for the renovated house as well as positive neighborhood effects, increasing nearby property values and neighborhood stabilization. Although appreciation is more likely to occur in areas with higher poverty rates, it does not appear to be associated with displacement (Wilson 2017a).

Partnerships between non-profit organizations and government agencies that coordinate housing rehabilitation, weatherization, and energy conservation programs may avoid redundancies in procedure and streamline application, funding, and inspection processes (Rohe 2010). Pooling resources can also support a coordinated approach to addressing health, safety, and energy inefficiencies (NCHH-Energy efficient home renovations). However, careful coordination is needed to prevent conflicting funding timelines and renovation schedule requirements among programs (Rohe 2010).

Housing rehabilitation grants are especially beneficial for individuals whose credit scores do not qualify them for loans, and for older adults with lower incomes who are hesitant to take on debt to improve the quality of their housing and accept loans that their children may have to repay (Rohe 2010). An evaluation of a Boston-based program which provides grants and zero-interest, deferred loans (i.e., due when the house is sold following a move or death) to qualifying older adults found that funds were used for critical repairs such as heating systems, improving housing conditions, and offering older homeowners the opportunity to age in place (Begley 2015).

Housing rehabilitation loan and grant programs that designate funds for families and individuals with low incomes can decrease disparities in access to quality housing, supporting improved housing-related health outcomes (Jacobs 2014). Housing rehabilitation efforts in declining neighborhoods with residents with low incomes may also have positive effects on neighborhood quality and stability (Smith 2011a, Helms 2012).

Housing rehabilitation efforts that increase property values may help reduce the racial wealth divide, since a significant part of the racial wealth divide at all income levels relates to lower homeownership rates and lower home values for people of color (PRRAC-Haberle 2021, Urban-McCargo 2020, Kaplan 2007). Black households experience the most severe energy insecurity, which experts suggest may be a product of residential segregation and housing discrimination (Hernandez 2019, Lewis 2019). Housing rehabilitation efforts that include weatherization assistance and energy efficient home improvements may improve the quality and value of homes, which supports potential wealth accumulation, addresses the disproportionate burden of energy insecurity on Black households, and helps reduce the racial wealth divide (Lewis 2019).

There is, however, some research that suggests that home improvement loans may be associated with an increase in property crime even while not having a significant impact on violent crime (Gill 2022). Home improvement loans appear to have a greater impact in neighborhoods that are not predominantly Black (Gill 2022).

Discriminatory housing, lending, and exclusionary zoning policies in the era of Jim Crow and government-sanctioned segregation led to the redlining practices of the Federal Housing Administration (FHA) and concentrated poverty. Redlining entrenched residential segregation, denying people of color access to government-insured mortgages and making the homes in the neighborhoods where they lived uninsurable (Kaplan 2007).

Housing rehabilitation became an area of concern in the early 1900s, which was exacerbated with the Stock Market Crash of 1929 and the Great Depression. In 1933, as part of President Roosevelt’s New Deal, the Home Owners’ Loan Act was signed into law, creating the Home Owners’ Loan Corporation (HOLC) which, together with the FHA, established new standards for mortgages in the U.S. to be mostly 30 years with low interest rates, backed by the federal government, though still restricted by race. Loans offered by the HOLC were intended to help individuals with mortgage payments and support regular home maintenance efforts that they could not otherwise afford (Home Owners' Loan Act). This aspect of the HOLC later evolved into Single Family Housing Repair Loans & Grants, now also known as the Section 504 Home Repair program, through the amended Housing Act of 1949; funds must be used to remove and repair health and safety hazards (USDA-Section 504 HRP).

The Fair Housing Act of 1968 was passed to reduce housing discrimination, but it has not stopped housing discrimination against people of color or helped rebuild the historically marginalized neighborhoods created by residential segregation (Urban-Reynolds 2021, AIC-HTF).

In the present day, formerly redlined neighborhoods remain more likely to include older homes in poorer condition, meaning homes that have energy inefficient systems; lead paint, soil, or pipes; mold and other allergens; repair needs; challenges with heating and cooling; and more (Braveman 2022). Efforts such as housing rehabilitation loan and grant programs, focused at local, state, and federal levels (CDC-Home improvement), can provide funding to homeowners in these formerly redlined neighborhoods to repair their houses, supporting health and safety at home. This allows families to remain in their communities and offers the potential to build wealth over time (USDA-Section 504 HRP).

• Are the funds from local housing rehabilitation loan and grant programs concentrated in a specific area? Is there a system in place to ensure the funds are allocated equitably?
• What other solutions can housing rehabilitation loan and grant program administrators implement to ensure equitable allocation of funds?
• How can housing rehabilitation loan and grant program administrators raise awareness about the program, especially among those most in need of housing rehabilitation assistance?
• Do local housing rehabilitation loan and grant programs partner with programs providing funds for weatherization and energy efficient improvements?

The Section 203(k) program is a housing rehabilitation loan and grant program, run by the U.S. Department of Housing and Urban Development (U.S. HUD), that supports rehabilitation of single family homes. This federal program can be combined with Community Development Block Grants (CDBGs), HOME Investment Partnership Program funds, and other programs (US HUD-203k).

The U.S. Department of Agriculture (USDA) Rural Development program’s Section 504 Home Repair program, also known as the Single Family Housing Repair Loans & Grants program, offers loans to homeowners with very low incomes and grants to older adults with very low incomes to improve housing quality and remove safety and health hazards. Additional funds were allocated to the loans portion of the program as part of the American Rescue Plan (ARP) Act in 2021 (USDA-Section 504 HRP). The program also offers Housing Preservation Grants (HPGs) to state and local governments, nonprofit organizations, or federally recognized tribes to repair or rehabilitate low and very low income housing in rural areas; individual homeowners are not eligible (USDA-HPG).

Partnership programs that focus on housing rehabilitation and energy efficiency improvements exist nationwide. The Green and Healthy Homes Initiative, Local Initiatives Support Corporation, and Build Healthy Places Network are three organizations that create and coordinate partnerships among stakeholders at the state, county, and city level to promote health through safe housing and community development initiatives (GHHI, LISC, BHPN). The Boston Home Center’s Senior Home Repair Program is an example of a local program for elderly homeowners which coordinates repair funding through neighborhood specific agencies (Boston-SHRP).

EmPOWER Maryland Low Income Energy Efficiency Program is an example of a state-sponsored effort to assist families with low incomes with energy conservation, air quality, and warmth improvements (MD DHCD-EmPOWER). MaineHousing’s Home Accessibility and Repair Program offers qualifying homeowners with low incomes grants for housing repairs, including heating and electrical system repairs, energy efficiency improvements, and structural repairs (MaineHousing-Repairs).

‡ Resources with a focus on equity.

ACEEE-Smarter House - American Council for an Energy-Efficient Economy (ACEEE). Smarter House: Reduce your impact and home energy breakdown.

BHPN-Resources^‡ - Build Healthy Places Network (BHPN). Network resource library: Access to research, best practices and models demonstrating what works, highlighting the health-related value and impact of community development work.

CDC-Home improvement^‡ - Centers for Disease Control and Prevention (CDC), Office of the Associate Director for Policy and Strategy. Home improvement loans and grants.

GHHI-10 elements - Green & Healthy Homes Initiative (GHHI). The 10 elements of a green & healthy home.

* Journal subscription may be required for access.

AIC-HTF - All-In Cities, an Initiative of PolicyLink. All-In Cities Policy Toolkit: Housing trust funds (HTF).

Begley 2015* - Begley J, Lambie-Hanson L. The home maintenance and improvement behaviors of older adults in Boston. Housing Policy Debate. 2015;25(4):754-781.

BHPN - Build Healthy Places Network (BHPN). Working at the intersection of community development and health.

Boch 2020* - Boch SJ, Taylor DM, Danielson ML, Chisolm DJ, Kelleher KJ. ‘Home is where the health is’: Housing quality and adult health outcomes in the survey of income and program participation. Preventive Medicine. 2020;132:105990.

Boston-SHRP - City of Boston, MA. How to apply for senior home repair: Senior Home Repair Program (SHRP).

Braveman 2022 - Braveman PA, Arkin E, Proctor D, Kauh T, Holm N. Systemic and structural racism: Definitions, examples, health damages, and approaches to dismantling. Health Affairs. 2022;41(2):171-178.

Breysse 2011 - Breysse J, Jacobs DE, Weber W, et al. Health outcomes and green renovation of affordable housing. Public Health Reports. 2011;126(Suppl 1):64-75.

CDC-Home improvement - Centers for Disease Control and Prevention (CDC), Office of the Associate Director for Policy and Strategy. Home improvement loans and grants.

GHHI - Green & Healthy Homes Initiative (GHHI). Addressing the social determinants of health and racial equity through healthy housing: We do this through the creation of healthy, safe and energy efficient homes.

Gibson 2011 - Gibson M, Petticrew M, Bambra C, et al. Housing and health inequalities: A synthesis of systematic reviews of interventions aimed at different pathways linking housing and health. Health & Place. 2011;17(1):175-84.

Gill 2022 - Gill LM, Boggess LN, Chamberlain AW. Neighborhood fixer uppers: Do home improvement loans influence crime across race and over time? American Journal of Criminal Justice. 2022.

Helms 2012* - Helms AC. Keeping up with the Joneses: Neighborhood effects in housing renovation. Regional Science and Urban Economics. 2012;42(1-2):303-13.

Hernandez 2019* - Hernández D, Siegel E. Energy insecurity and its ill health effects: A community perspective on the energy-health nexus in New York City. Energy Research and Social Science. 2019;47:78-83.

Home Owners' Loan Act - Thompson L. Home Owners' Loan Act (1933). The Living New Deal. 2016.

Howden-Chapman 2007 - Howden-Chapman P, Matheson A, Crane J, et al. Effect of insulating existing houses on health inequality: Cluster randomized study in the community. BMJ. 2007;334(7591):460.

Jacobs 2014 - Jacobs DE, Breysse J, Dixon SL, et al. Health and housing outcomes from green renovation of low-income housing in Washington, D.C. Journal of Environmental Health. 2014;76(7):8-16.

Kaplan 2007* - Kaplan J, Valls A. Housing discrimination as a basis for Black reparations. Public Affairs Quarterly. 2007;21(3):255-273.

Krieger 2002a - Krieger J, Higgins DL. Housing and health: Time again for public health action. American Journal of Public Health. 2002;92(5):758-768.

Lewis 2019 - Lewis J, Hernández D, Geronimus AT. Energy efficiency as energy justice: Addressing racial inequities through investments in people and places. Energy Efficiency. 2019;13(3):419-432.

LISC - Local Initiatives Support Corporation (LISC). Helping neighbors build communities: LISC equips struggling communities with the capital, strategy and know-how to become places where people can thrive.

Madison-Home rehab - City of Madison, WI. Rehabilitation programs.

MaineHousing-Repairs - MaineHousing: Maine State Housing Authority. Home accessibility and repair program.

MD DHCD-EmPOWER - Maryland Department of Housing and Community Development (MD DHCD). EmPOWER Maryland Low Income Energy Efficiency Program (LIEEP).

NCHH-Energy efficient home renovations - National Center for Health Housing (NCHH). Energy efficient home renovations.

NICE-Taske 2005 - Taske N, Taylor L, Mulvihill C, et al. Housing and public health: A review of reviews of interventions for improving health - Evidence briefing. London, UK: National Institute for Health and Clinical Excellence (NICE); 2005.

PRRAC-Haberle 2021 - Haberle M, House S, eds. Racial justice in housing finance: A series on new directions. Washington, D.C.: Poverty & Race Research Action Council (PRRAC); 2021.

Rohe 2010* - Rohe WM, Cowan SM, Quercia R. Supporting low-income homeowners: Lessons from a program to coordinate weatherization and rehabilitation services. Housing Policy Debate. 2010;20(3):523-546.

Saegert 2003 - Saegert SC, Klitzman S, Freudenberg N, et al. Healthy housing: A structured review of published evaluations of U.S. interventions to improve health by modifying housing in the United States, 1990-2001. American Journal of Public Health. 2003;93(9):1471-1477.

Smith 2011a* - Smith MM, Hevener CC. The impact of housing rehabilitation on local neighborhoods: The case of small community development organizations. American Journal of Economics and Sociology. 2011;70(1):50-85.

Thomson 2015 - Thomson H, Thomas S. Developing empirically supported theories of change for housing investment and health. Social Science & Medicine. 2015;124:205-214.

Urban-McCargo 2020 - McCargo A, Choi JH. Closing the gaps: Building black wealth through homeownership. Washington, D.C.: Urban Institute; 2020.

Urban-Reynolds 2021 - Reynolds K, Lo L, Boshart A, Galvez MM. Federal reforms to strengthen housing stability, affordability, and choice. Washington, D.C.: Urban Institute; 2021.

US HUD-203k - U.S. Department of Housing and Urban Development (U.S. HUD). 203(k) rehabilitation mortgage insurance.

USDA-HPG - U.S. Department of Agriculture (USDA), Rural Development Programs & Services. Housing preservation grants (HPG): Program 101.

USDA-Section 504 HRP - U.S. Department of Agriculture (USDA) Rural Development Programs & Services. Section 504 Home repair program (HRP): Single family housing repair loans & grants, program 101.

WI DEHC-CDBG - Wisconsin Divisionion of Energy, Housing and Community Resources (WI DEHC). Community Development Block Grants (CDBG) program.

WI DEHCR-HHR - State of Wisconsin, Division of Energy, Housing, and Community Resources (WI DEHCR). HOME Homebuyer and Rehabilitation program (HHR).

Wilson 2017a* - Wilson B, Kashem SB. Spatially concentrated renovation activity and housing appreciation in the city of Milwaukee, Wisconsin. Journal of Urban Affairs. 2017;39(8):1085-1102.