7 Ways to Cover the Cost of Emergency Home Repairs

Home Ownership Costs, Mortgages
You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. Here's how we make money.
How to Pay for Emergency Home Repairs

If you’re a homeowner and your water heater hasn’t gone out yet, just wait. They bust a seam or spring a leak or otherwise go on the fritz every 10 years, give or take. So you’ve got that to look forward to.

Emergency home repairs are financial dings that never come at a good time. Water heaters are actually the least of your concerns; usually a few hundred bucks later you’re back to your hot showers. But a new furnace, air conditioning unit or roof — now we’re talking big-money repairs that can easily break your budget.

A recent survey by HomeServe USA reveals 25% of homeowners don’t have savings set aside for major household repairs. Nearly half of homeowners (48%) have had an emergency home repair in the past 12 months, according to the same survey.

When you face a major expense and lack savings to tap, where can you turn? Time to open up the NerdWallet first aid kit for emergency home fixes.

Here are 7 ways to cover emergency home repair expenses.

1. HELOC

A home equity line of credit allows you to tap the value in your home as you need it. That’s perfect for home improvements, as well as those unexpected major expenses. But remember, a HELOC is a loan backed by your home, so spend wisely and pay promptly.

2. Homeowners insurance claim

Remember to check your insurance policy to see if a home repair emergency is covered. For example, a new roof may have at least some, if not all, of its replacement cost covered if it was damaged by a storm. You might not be able to see the damage from the ground, but a qualified inspector will find it for sure.

3. Government assistance

The FHA 203(k) and Limited 203(k) loan programs allow borrowers to buy or refinance a property, with additional funds added to the total loan amount to pay for repairs or upgrades.

The Department of Housing and Urban Development offers the Title I Property Improvement Loan program. Title I loans are FHA-insured loans issued by lenders, particularly for owners with little equity in their homes. The proceeds can be used for major repairs, or even for appliances and other household items that “make your home more livable and useful.” But no, that doesn’t include luxury items like a swimming pool or hot tub.

The U.S. Department of Agriculture can be a resource as well. The USDA Section 504 Home Repair program helps very-low-income homeowners in rural areas to repair, improve or modernize their homes. Grants are also available for homeowners 62 or older.

4. Community development programs

These programs are administered by state or local governments, agencies and financial institutions. For example, municipalities often use Community Development Block Grants issued through HUD to offer emergency repair loans or grants to local homeowners.

Sometimes there are restrictions to qualify for such programs, such as an income limit equal to 80% of the area’s median income. Other assistance plans may serve senior or disabled homeowners. But it’s worth checking with your local Office of Housing, Housing Services, Housing Authority or similarly named agency for details.

5. Disaster relief

If your emergency home repair is disaster-related, you may want to turn to relief organizations like the Red Cross or the Federal Emergency Management Agency. FEMA can offer funds for emergency repairs not covered by your homeowners insurance. This money is for major repairs for safety or sanitary living conditions, not to restore your home to its pre-disaster condition.

6. Credit card

This is probably our first instinct: Tap the plastic. But think twice. Your available credit may not be enough to get the job done. And if your card has a high interest rate, you might still be paying off that last home disaster when the next one strikes.

7. Cash-out refinance

And as a last resort, if you have equity in your home, you might consider a cash-out refinance for emergency repairs. The problem is, it can take time to shop for a good refinance rate.

Other resources

Additional aid for emergency home repairs can include Habitat for Humanity, local service organizations and nonprofits, church volunteers and community centers.

If you’re going through a rough patch and tap one of these resources, you may even be inspired to join in and help someone else once your home repair emergency has been solved.

More from NerdWallet:
How to choose the best mortgage
Calculate your monthly mortgage payment
Find a mortgage broker

Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: hal@nerdwallet.com. Twitter: @halmbundrick

This article was written by NerdWallet and was originally published by Redfin.