How to Choose the Right Mortgage for a Historic Property


Purchasing a historic property can be a dream come true for many homeowners, offering unique charm, architectural significance, and a connection to the past. However, financing a historic home requires careful consideration due to its distinctive characteristics and potential preservation requirements. This article explores essential factors to consider when choosing the right mortgage for a historic property, ensuring a successful and informed home buying experience.

Understanding Historic Property Designations

1. Identify Historic Designations

Before exploring mortgage options, determine if the property is designated as historic or located within a historic district. Historic designations can influence renovation restrictions, tax incentives, and the availability of specialized financing programs.

2. Local Preservation Guidelines

Research local preservation guidelines and regulations governing historic properties. These guidelines may impact renovation plans, influencing your choice of mortgage and financing requirements.

Mortgage Options for Historic Properties

1. Traditional Mortgages

Traditional mortgages, such as conventional or FHA loans, are available for historic properties. These mortgages typically require a thorough appraisal to assess the property’s condition and value, considering its historical significance.

2. Historic Rehabilitation Loans

Specialized loan programs, such as FHA 203(k) loans or Fannie Mae HomeStyle Renovation loans, offer financing specifically for renovating historic properties. These loans allow borrowers to finance both the purchase price and renovation costs in a single mortgage.

3. Energy Efficiency Loans

Some states and municipalities offer energy efficiency loans or grants for historic properties undergoing energy-efficient renovations. These programs may provide favorable terms and incentives for incorporating sustainable upgrades.

Factors to Consider When Choosing a Mortgage

1. Property Condition and Renovation Needs

Assess the property’s condition and renovation needs carefully. Consider whether the renovations are cosmetic or structural and how they align with preservation guidelines. Choose a mortgage that accommodates the scope and cost of renovations.

2. Appraisal and Valuation

Due to their unique characteristics, historic properties often require specialized appraisals. Work with a lender experienced in historic home financing to ensure accurate valuation and compliance with lending requirements.

3. Financial Preparedness

Evaluate your financial readiness to purchase and renovate a historic property. Consider down payment requirements, closing costs, and ongoing maintenance expenses associated with homeownership.

Leveraging Tax Incentives and Credits

1. Historic Preservation Tax Credits

Explore federal, state, and local historic preservation tax credits available for renovating historic properties. These credits can offset renovation costs and improve the financial feasibility of owning a historic home.

2. Energy Efficiency Credits

Take advantage of energy efficiency tax credits for incorporating sustainable features into your historic property. Consult with a tax professional to maximize available credits and incentives.

Working with Experienced Professionals

1. Consult Historic Preservation Experts

Engage with historic preservation consultants or architects knowledgeable about historic properties. Their expertise can guide renovation decisions, ensure compliance with preservation standards, and support your mortgage application.

2. Collaborate with Lenders Specializing in Historic Homes

Select a lender with experience in financing historic properties. These lenders understand the unique challenges and requirements associated with historic homes, offering tailored mortgage solutions and valuable guidance throughout the process.


Choosing the right mortgage for a historic property requires thorough research, careful planning, and collaboration with knowledgeable professionals. By understanding historic designations, exploring specialized mortgage options, evaluating renovation needs, leveraging tax incentives, and working with experienced experts, homeowners can navigate the complexities of purchasing and renovating a historic home successfully. With the right mortgage in place, you can preserve the unique character of your historic property while enjoying the benefits of homeownership rooted in history and heritage.

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