There is a new source of financial help for owners of old houses. Historic preservation loans, insured by the Federal Housing Administration, are now available from FHA-approved banks, savings, and loan associations, credit unions, and finance companies.
Owners of eligible properties can borrow as much as $45,000 to preserve, rehabilitate or restore their property. The maximum amount of the loan is based on the number of units in the building.
Owners of a single-family house can get up to $15,000. A house with two units is eligible for $30,000 and one with three units, $45,000. The loans are made at the current market interest rate - up to 12 percent - with a maximum of 15 years to repay.
The historic preservation loan program was added to the Title I home improvement loan program to give owners of historic buildings more assistance than was available under the old program. The advantage is that owners of buildings eligible for the historic preservation loans can borrow more money for a longer time.
The maximum Title I loan is $10,000 for a single-family house and $25,000 for a multi-family dwelling with five units. The repayment period is a maximum 12 years. But while the preservation loans are restricted to residential structures, Title I loans can also be used for commercial buildings.
Legislation has been introduced by both Rep. James A. S. Leach (R-Iowa) and Del. Walter Fauntroy (D-D.C.) to expand the historic preservation Loan program to cover commercial structures. The Leach bill would also increase the loan limit to $30,000. The Fauntroy bill would raise the limit to $35,000 in most places and to $50,000 in such high-cost areas as the District of Columbia.
To qualify for the program, a building must be residential. No more than 20 percent of the total area can be used for commercial or other purposes.And it must be of historic value. That means that the building must be listed on or be eligible for the National Register of Historic Places.
The National Register, maintained by the Department of the Interior, is the official list of buildings, sites, districts and structures considered significant in American history and culture and worth preserving.
A building can also qualify if it is in a historic district that is on or eligible for the National Register. A historic district is an area that has a special character or interest. Not all the buildings in it are listed individually and not all of a neighborhood or town is included in a historic district.
Historic districts in this region include Annapolis, Takoma Park and Garrett Park in Maryland and Alexandria, Leesburg and Fredericksburg in Virginia. In the District, parts of Capitol Hill, Anacostia, LeDroit Park, Logan Circle, Georgetown and Dupont Circle are also historic districts.
To get on the National Register a building or district has to meet certain criteria set by the Secretary of the Interior. Except in very special circumstances a building has to be more than 50 years old to qualify.
It must also be of significance in American history, architecture or culture. It can be significant because it was associated with an important person or an event. The Frederick Douglass Home is on the National Register because of Douglass' importance as a 19th century civil rights figure; Ford's Theater is on because of the Lincoln assassination.
A building or district does not have to be of national importance to be on the register.The 1966 Historic Preservation Act extended the program to cover buildings and districts that are of state or local importance.
For example, the Mt. Zion United Methodist Church at 1334 29th St. NW is on the register because of its architecture and because it is the home of one of Washington's oldest black congregations. Logan Circle was made a historic district, not because of its national importance but because of its architectural and historical significance to the city of Washington.
If a building seems to fit the criteria for the National Register, the owner should check with the office of the local state historic preservation officer to see if the building is eligible. In the District the officer is the director of the Department of Housing and Community Development. In Maryland, the office is at 21 State Circle, Annapolis 21401. In Virginia, the officer is the executive director of the Virginia Historic Landmarks Commission, 221 Governor St., Richmond 23219.
The preservation officer is in charge of making nominations to the National Register; that office is also asked certify to an FHA-approved lender that buildings are eligible for the program. The officer must also approve the home improvement plans before the lender will release the money.
This is done to make sure that the work will not harm the building's historical character. The officers refer to "Guidelines for Rehabilitating Old Buildings," which is published by HUD and the Department of the Interior, in evaluating the plans. Owners should get a copy before they even begin to plan the work. When the officer has approved the plans and the lender has approved the owner's credit, the work can begin.