In this article, we explore the options for home improvement loans in California, including grants, government programs, and non-profits that provide financial assistance. We also look at frequently asked questions to help you make the best decision for you.

Home Improvement Loans in California 

California offers a variety of home improvement loans for financing your home renovations:

Home Equity Loans

A home equity loan is designed to allow you to borrow against the equity you currently have in your home. Homeowners who choose to get a home equity loan will get a lump-sum payment that they then pay back over a predetermined period of time at a fixed interest rate. For most homeowners, the payback period is five to 20 years, although terms can be as long as 30 years. If you have a lot of equity in your home, this can be a good option for funding a home renovation, since you’ll be increasing the value of your home.

Home Equity Lines of Credit

A home equity line of credit, otherwise referred to as a HELOC loan, is a line of credit that you can use to fund home improvement projects. Because it’s secured by your home, it typically has a lower interest rate than other types of loans. A HELOC is different than a home equity loan because you can access cash on an as-needed basis during a draw period, as opposed to receiving a lump sum. You will also have a variable interest rate which can fluctuate throughout the life of your loan.

RenoFi Loans

RenoFi Loans are another great option for California homeowners. We have lending partners nationwide and the RenoFi Advisors can help you get the lowest rates with the longest terms. Additionally, because RenoFi Loans factor in the after-renovation value of your home, homeowners can increase their borrowing power by as much as 11 times.

USDA Single Family Housing Repair Loans

The USDA Single Family Housing Repair program offers loans to low-income residents in eligible rural areas to repair, enhance, or update their homes. While the maximum loan amount is $40,000, these loans can be combined with a grant for up to $50,000. The loans have a 20-year term with a fixed interest rate of 1%.

To be eligible, you must:

  • Own and occupy your home.
  • Be unable to obtain affordable credit elsewhere.
  • Have a household income within the “very low limit” category by county.

VA Home Improvement Loans

VA home loan programs, offered by the United States Department of Veterans Affairs, are a great way for current and veteran military members, as well as their spouses, to access the funds for buying, building or renovating your home. The Native American Direct Loan (NADL) program can provide more attractive terms than you’d find with a typical home loan from a private lender. 

A VA-backed home loan provides assurance for a portion of the loan from a private lender. Should your VA-backed home loan face foreclosure, the lender can recoup a portion or all of their potential losses. This reduced risk for the lender often results in more favorable loan terms. In the majority of cases, you won’t need to provide a down payment. 

To be eligible, you must:

  • Live in the home you’re using the NADL to buy, build, or improve.
  • Live in a country where the tribal government has an agreement with the United States Department of Veterans Affairs.
  • Have a valid VA home loan Certificate of Eligibility (COE).
  • Meet the credit standards.
  • Provide proof of income that shows you can cover the mortgage payments and other costs of owning a home.

Cal Lending Home Improvement Loans

Cal Lending offers a minimum loan of $250,000. This is an excellent option for Californians looking to fund an extensive or major renovation, but the loan is only applicable to a first mortgage. You can use the loan to remodel your current space, build an addition, or add a pool to your property. To be eligible, you need to have approved plans and hire a licensed general contractor to perform the work.

Cash-Out Refinance

With a cash-out refinance, you can access cash to fund your home improvement project by getting a new loan that’s larger than your current mortgage. You would receive the difference between the two mortgages in cash that you can then use to complete your renovation. Cash out refinance rates can either be fixed or variable based on the lender. 

Personal Loan

A personal loan is another option for funding a home improvement project. With a personal loan, you aren’t borrowing against the value of your home, and because the interest rate is set when the loan is approved, the monthly payment will stay the same. That said, it can be harder to qualify for this type of loan if you don’t have a good credit score. You also can expect a high interest rate because the loan is unsecured.

Home Improvement Grants in California

California offers over 200 grants for home repair and improvement, specifically tailored to assist lower-income residents. All homeowners can apply for these grants to make home improvements and repairs. However, seniors, veterans, individuals with disabilities, and households with lower incomes are prioritized.

USDA Single Family Housing Repair Grants

The USDA Single Family Housing Repair program provides grants for elderly, low-income homeowners in eligible rural areas. The grant aims to remove potential safety hazards for these homeowners and make their homes safer. The maximum grant is $10,000 for seniors over 62 years old, and you must repay the grant if you sell the property within three years.

Government Programs for Home Improvements

In California, there are three sources of financial aid for home improvement. These include federal programs, the state of California, and county and city programs. Most of the funds and programs for home renovations are administered at the county and city level. The federal government does not provide grants directly to homeowners. However, many state and local home improvement programs receive government grant money, which they can distribute to residents in need.

Some examples include:

  • Federally funded community development block grants go to local government to support community development activities, including housing rehabilitation for low- and moderate-income homeowners.
  • The California Housing Finance Agency offers assistance for low-income households and first-time homebuyers.
  • The Low-Income Home Energy Assistance Program offers free energy efficiency upgrades to low-income California residents. 
  • The federal Inflation Reduction Act offers two home improvement rebates for low-income California residents (Homeowner Managing Energy Savings and High Efficiency Electric Home Rebate Act). 
  • The Internal Revenue Service offers rebates for energy-efficient home improvements if you have tax liability.
  • The U.S. Department of Energy’s Weatherization Assistance Program reduces energy costs for low-income households in California through weatherization improvements and upgrades.
  • The Federal Emergency Management Agency provides financial assistance to repair damage to your primary residence caused by a natural disaster.
  • The FHA 203(k) Rehabilitation Loan helps you combine the cost of purchasing a home and the expenses of repairs or improvements into a single mortgage. 

Non-Profit Organizations Offering Home Improvement Loans

In California, several non-profit organizations offer home improvement loans to support homeowners. Some examples include: 

  • Self-Help Enterprises: Offers home improvement loans and grants to low-income homeowners in nine counties in the San Joaquin Valley. This is used specifically for critical repairs.
  • Rebuilding Together: Provides home repair services, including essential repairs and accessibility upgrades, often at no cost.
  • GRID Alternatives: Offers solar panel installation and energy-efficient upgrades to low-income homeowners through partnerships and grants. 
  • Habitat for Humanity: Offers affordable home repair programs, including low-cost loans or grants for essential repairs. 
  • Local Community Development Corporations: Offers financial assistance, loans, or grants for home improvements within specific communities. They cater to individuals with limited financial resources and insufficient living conditions.

Frequently Asked Questions

What are the options for home improvement loans in California?

In California, homeowners have plenty of choices for funding home improvements, including personal loans, USDA loans, and FHA loans. You can also get a home equity loan or home equity line of credit, both of which require collateral in the form of your home’s equity.

What are home improvement grants, and how can you apply?

There are over 200 grants for home repair and improvement in California. These grants are typically provided by government agencies, non-profit organizations, or local authorities. To apply, follow the instructions provided by the grant program. Applications can be submitted online.

How do government programs support home improvement in California?

Government programs such as FHA 203(k) and CalHFA provide financial aid for making necessary repairs, enhancing energy efficiency, and improving living conditions. They prioritize groups such as low-income households, seniors, veterans, and victims of natural disasters.

How do non-profit organizations support home improvement in California?

Non-profit organizations in California provide financial aid, grants, or low-cost loans specifically aimed at facilitating repairs, renovations, or energy-efficient upgrades. They prioritize low-income households, seniors, veterans, and those facing financial challenges. Non-profits collaborate with government agencies, local communities, and volunteers to ensure that you have access to essential resources and expertise for your improvement projects.

How RenoFi Can Help You Find the Best Home Improvement Loans for California

Choosing a home improvement loan is a major decision. It’s important to shop around and compare different lender rates and offers before you decide. With RenoFi, the process is easy. We partner with credit unions across the country and work with homeowners to find the best credit union for their situation, ensuring they get the right loan amount for the best rates and lowest fees. Ultimately, we save homeowners valuable time and money throughout the process as as trusted advisor.

RenoFi Loans also offer a variety of options for homeowners to borrow more money with the lowest rates and fewer fees. Our loans boost your borrowing power by factoring in the after-renovation value of your home versus its current value, helping you tackle everything on your wish list. 

We encourage you to use our loan calculator, or call a RenoFi Advisor too learn more about what your borrowing power could be for your next home improvement project.



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