Buying A Historic Home? What You Need To Know
The idea of owning a historic home can be alluring. However, a property like this comes with many financial and even possibly governmental regulations. Before you take on history, consider some of the following questions rooted in the present:
What determines a historic home?
The National Register of Historic Places evaluates properties based on age (at least 50 years old), character (it should look the way it did when it was constructed) and significance (the house may have had something to do with a historic event or person).
Make sure you are also aware of your local building codes and state/local preservation requirements. Much of what is considered “historic” is local.
Are you prepared to live in a historic district?
A designated historic district may not be the charming environment that you originally imagine. You will have to follow very strict rules that tell you what type of exterior you may have, including paint colors, window and door types, and possibly even what kind of landscaping allowable. Check with your local planning department.
Keep in mind that the National Register of Historic Places does not restrict you from how you can present your home — as long as you live in a district that is only listed on that register. However, states and local townships may have very specific restrictions, just as if you are following the rules of a homeowners’ association.
Are you prepared to share your home with others?
Historic homes attract interest from tourists, local civic groups, and even cable-television and news shows. For people who want to know about the history of your home and have questions, you will need to be gracious, patient and ready to share your knowledge and experience.
Are you prepared for the expense of maintaining a historic house?
Most historic houses built in previous centuries are obviously sturdy and meant to last. However, if something does go wrong, maintenance and repair can get costly, especially if the project requires parts that are no longer available. If you’re buying a historic home that is considered a “fixer-upper,” you may be in for more costs than you originally expected. Repairs and replacement needs may not reveal themselves to you right away. Be sure to get an expert — especially an appraiser — to examine the house, and have all the usual inspections completed ahead of time, including termite, radon, and electrical wiring.
Note that some states actually offer tax incentives and grants for repairs to historic homes. Check with your local building office.
Will financing and insurance be readily available?
If a home is especially old and needs unusual or extensive repairs, banks and insurance companies may be reluctant to get involved. One solution is to consider applying for a private HUD Title 1 loan, which may cover smaller repairs. A 203k loan, which is also known as rehab mortgage insurance, can possibly help cover purchase and rehab costs. Fannie Mae offers a HomeStyle Renovation mortgage as well.
Will you be able to live a modern life in an old home?
Living in a historic home is a enriching and unique experience, but make sure that the house is still modern-minded enough to handle smart appliances and lighting, and provide you with strong WiFi. Also, what would you be willing to live without in order to maintain the character of your historic home, especially if your preservation board decrees it? You may have to give up certain considerations like a swimming pool or a satellite dish. Even if you are allowed to include certain upgrades, they may affect the resale value and the character of the historic home.
Considering buying a historic home sounds like a quaint idea, but remember to consider all the obligations and expenses that may come with the purchase. You may not be able to legally modernize or significantly alter the property, and the maintenance and upkeep could become challenging. Owning a historic home comes with great responsibility; you are also keeping the house in top shape not just for you but also for the benefit of the community.