Historic Homes: Special Mortgages & Challenges

By | December 9, 2023

Purchasing a historic home can be a dream come true for many, offering a unique blend of history, character, and architectural beauty. However, financing and maintaining such properties often come with their own set of unique challenges and requirements. In this comprehensive guide, we explore the specialized mortgages available for historic homes and the challenges that potential buyers may face.

Understanding Special Mortgages for Historic Homes

Historic homes often qualify for specialized mortgage programs designed to aid in their preservation and restoration. These programs, such as the Federal Housing Administration’s (FHA) 203(k) rehabilitation mortgage, offer funding for both the purchase and renovation of historic properties. It’s crucial for buyers to understand the terms and conditions of these special mortgages, which often include specific requirements for renovation and preservation.

Challenges in Appraising Historic Homes

Appraising historic homes can be challenging due to their unique characteristics and lack of comparable properties. Appraisers must consider factors like historical significance, architectural style, and the condition of period-specific features. Buyers should seek appraisers with experience in historic properties to ensure a fair and accurate valuation.

Renovation and Preservation Requirements

Owning a historic home often comes with strict renovation and preservation guidelines, especially if the property is listed on a historic register. These guidelines can affect everything from paint colors to building materials, often leading to higher renovation costs and longer project timelines. Potential buyers should thoroughly research these requirements before committing to a purchase.

Navigating Zoning and Landmark Restrictions

Historic homes are often subject to stringent zoning and landmark restrictions, which can limit changes to the property’s exterior and sometimes the interior. Buyers should investigate local historic preservation ordinances and landmark restrictions to understand what modifications are allowed.

Insurance Considerations for Historic Homes

Insuring a historic home can be more complex and costly than insuring a modern home. Insurance policies for historic properties often require additional coverage to account for the increased cost of period-specific repairs and restorations. Buyers should consult with insurance providers who specialize in historic homes to find the most suitable coverage.

Financing Renovations and Upgrades

Financing renovations for historic homes can be challenging due to higher restoration costs and the need for specialized labor and materials. Buyers should explore various financing options, including government grants, tax incentives, and special loan programs dedicated to historic preservation.

The Importance of Professional Inspections

Professional inspections are crucial when purchasing a historic home. Inspectors experienced in historic properties can identify potential issues, such as outdated electrical systems or structural problems, that are common in older homes. These inspections help buyers understand the scope and cost of necessary repairs and renovations.

Historic Homes as Investments

While historic homes can be challenging and expensive to maintain, they can also be excellent investments. These properties often retain their value better than modern homes, especially if they are well-maintained and located in historic districts. Buyers should consider the long-term investment potential when purchasing a historic property.


Purchasing a historic home is a unique opportunity to own a piece of history. While it comes with a set of challenges and special requirements, the rewards of preserving a historic property can be immense. By understanding the special mortgages, renovation requirements, and other challenges associated with historic homes, buyers can make informed decisions and enjoy the beauty and history of their property for years to come.

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