Homeowners Foundation Engineers Network

Foundation Repair Financing

Financial Security

A settling foundation can unsettle your bank account. Unexpected foundation repairs may cause cracks in a homeowner’s financial security and lead to questions about how to finance vital fixes. Let us help you navigate foundation repair financing.

foundation repair financing

Because a foundation is – quite literally – the foundation upon which a home is built, for peace of mind, and to prevent problems from escalating to major structural concerns, repairs should be made as soon as possible.

This means homeowners need to be vigilant about bowing walls, cracked basement floors or walls, settling foundations, or misaligned doors or windows.

In fact, catching foundation issues early may mean the difference between spending a few hundred dollars to fix a crack and thousands for more serious repairs. Major foundation work requiring hydraulic piers may push the price tag past five figures.

Foundation Repair Financing Options

When basement cracks are wide, but the budget narrow, property owners should consider their financing options.

Contractor Financing

Thousands of contractors work with Hearth, a company serving as a link between contractors, customers, and banks. Hearth is a service provider and program administrator for federally insured, federal- and state-chartered banks providing consumer loans. Borrowers receive a loan agreement directly with the funding bank, while Hearth services the loan at the direction and control of the lender.

Insurance

While most foundation repair work isn’t covered by insurance, there are certain situations where insurance may cover the project.

Covered

Exposed foundation and ECP Steel push piers
ECP steel push pier
  • Lightning or fire
  • Windstorm
  • Damage caused by aircraft
  • Explosions
  • Riots or civil disturbances
  • Damage caused by vehicles
  • Vandalism
  • Falling objects
  • Volcanic eruptions
  • Collapse from the weight of snow, ice, or sleet
  • Water damage from plumbing, heating or air conditioning overflow

Not Covered

  • Natural setting, cracking, shrinking, bulging or expansion
  • Earthquakes or floods
  • Tree roots
  • Faulty construction
Exposed foundation and ECP Steel push piers
ECP steel push pier

Other Foundation Repair Financing Options

Home Equity Line of Credit

Choosing this method allows a homeowner to secure a line of credit based on their home’s equity. Home equity is determined by subtracting the amount still owed on a mortgage from the current market value of the home.

Refinanced Mortgage

Refinancing a mortgage allows a homeowner to switch out their existing mortgage for a new one while converting some of the home’s equity to cash.

Second Mortgage – A second mortgage is a loan secured on a home’s accumulated equity.

Government Loan – The U.S. Federal Government’s Housing Administration runs a loan program called Title 1 for homeowners with very little equity. The loans can be used to finance essential repairs, such as structural issues.

Use a Credit Card – A credit card is available for immediate use and doesn’t require a loan application, however, the interest rates are typically higher. For smaller, emergency repairs a credit card might be the best option. Certain credit cards offer cashback options, in which a small percentage of the amount spent is paid back to the user.

Borrow From Your 401(k) – Employers often permit borrowing from a 401(k) to find home repairs and renovations. Doing so requires no credit check or paperwork, however, employees are required to pay the borrowed money back into a 401(k) before leaving the company.

While there are options in place to pay for foundation repairs, the best way to keep foundation costs low is to fix problems immediately. The longer you wait, the worse the damage can become, increasing the project’s price.

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