Buying a historic house

Have you ever dreamed of owning a piece of history, like a grand Federal-style home in Savannah, Georgia, a townhouse steeped in architectural significance in Philadelphia, or a midcentury modern gem with a storied past in Palm Springs, California? Buying a historic house can be a deeply rewarding experience, but it comes with its unique set of considerations. In this guide, we’ll walk you through the key factors to ponder before making the decision to own a piece of living history.

What Defines a Historic Home?

To be officially recognized as historic, a property must meet specific criteria related to age, integrity, and historical significance. Typically, a property must be at least 50 years old to be considered historic. Additionally, it must meet one or more of the following criteria:

1. Represent a specific architectural style with a high degree of original character.
2. Be associated with significant historical events or individuals.

Moreover, a home may also be located within a designated historic district, even if it’s not individually listed on the National Register of Historic Places.

Is a Historic Home Right for You?

Before embarking on the journey of owning a historic home, it’s crucial to ask yourself why you want it. While there may be tax benefits, the ideal buyer should value the story and architecture of the home. If your primary focus is financial gain, be prepared to face the challenges of upkeep and potential renovations.

Buy a historic home if you:

1. Want to preserve its character, quirks, and charm for future generations.
2. Are willing to adhere to specific preservation guidelines set by local jurisdictions.
3. Desire to share the home’s unique story with the community through events like fundraisers, open houses, or tours.

Avoid a historic home if you:

1. Seek to completely renovate or modernize the property, erasing its historical significance.
2. Plan to make modifications without adhering to preservation guidelines, potentially facing legal restrictions.
3. Prefer a low-maintenance property and are unwilling to invest time and money into meticulous upkeep.

Financial Considerations of Buying a Historic Home:

Pros:

• Federal and state tax credits may be available for historic homeowners, potentially reducing costs.
• Various financial incentives, such as tax-reduction programs or low-interest home improvement loans, can further support the preservation of historic properties.

Cons:

• Hidden issues in older properties can be both trickier and costlier to fix, especially in homes with historic designation.
• Construction, restoration, and renovation work in a historic home typically come with a higher price tag and may require specialized craftsmen.
• The cost of insuring a historic property is often higher.
• Assessing the market value of a historic property can be complicated and may depend on factors like its association with historical figures or events.

Getting a Mortgage Loan for a Historic Home:

While securing a mortgage for a historic home may be slightly more challenging, it’s certainly possible. Consider options like FHA 203(k) loans, which allow for financing both the purchase and necessary repairs. Additionally, Title I property improvement loans from the Department of Housing and Urban Development can be used in conjunction with 203(k) loans.

Conclusion:

Owning a historic home is a privilege that comes with responsibilities. Understanding the unique challenges and potential rewards is crucial before taking the plunge. By appreciating the historical significance and committing to its preservation, you can embark on a journey that not only enriches your life but also contributes to the legacy of your community.