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Transforming History Into Profit: Utilizing National Historic Rehab Grants for Real Estate

To many experienced real estate investors, old properties are a diamond in the rough, especially those with fix-and-flip expertise. Restoring historic properties present challenges, such as higher costs and the obligation to meet more stringent regulations.

One creative way to overcome these obstacles is by utilizing national historic rehab grants. Keep reading for a closer look at the opportunities available for investors interested in minimizing the downsides and coping with the challenges these properties can present while doing their part to preserve culturally significant structures.

Purpose and Eligibility

These grants are awarded with the primary goal of preserving or restoring historically significant buildings. To qualify for grant funding, these properties must be listed on the National Register of Historic Places (NRHP) or be eligible for inclusion. Listing on the NRHP requires meeting specific criteria related to the property’s historical significance, integrity, and age. Applicants must also show how they intend to use the grants and comply with specific preservation guidelines.

Historic Preservation Fund (HPF) Grants

The HPF makes preservation grants available to support historic preservation projects across the U.S. Though exact amounts can vary, these grants typically require a matching contribution of 50% of total projected costs. 

Certified Local Government (CLG) Grants

These grants are awarded through the HPF but through partnerships with various State Historic Preservation Offices (SHPOs). Much like HPF grants, CLG Grants are awarded with the intent to sustain and promote local historical preservation initiatives.

Federal Historic Preservation Tax Incentives

The Federal Historic Preservation Tax Incentives offers a 20% income tax credit for rehabilitating historic buildings engaged in some income-producing activity, such as paid tours or workshops.

Save America’s Treasures Grants

This program, funded by the National Park Service, provides grants to preserve nationally significant historic properties. Unlike some other grants on this list, applicants can receive substantial funding for both construction and conservation activities.

Funding Uses

National historic rehab grants can be used for a variety of activities, including:

  • Building Rehabilitation: The core focus here is to restore and repair the physical structure, ensuring it meets all mandated safety and access standards.
  • Architectural and Engineering Services: A portion of the awarded grants are intended to fund expert consultation to create accurate and compliant architectural plans.
  • Accessibility Upgrades: Though implementing some of these changes can sometimes be tricky, the primary goal of this type of work is to make historic buildings accessible to all by installing necessary upgrades such as elevators, ramps, or other modifications that comply with the Americans with Disabilities Act (ADA).

Benefits for Real Estate Investors

National historic rehab grants can present quite a few advantages for savvy real estate investors. The funds provided typically cover a significant portion of rehabilitation costs, reducing out-of-pocket expenses and limiting financial risk. 

Tax incentive programs like those offered by the FHP offer significant tax relief and can provide opportunities for significant economic gain.

Application Process

Securing historic rehab grants involves a fair amount of due diligence and preparation. The most important element of the application process is a well-drafted and thorough proposal. Hiring an architect, engineer, or other professionals with expertise in historical preservation is highly recommended.

Conclusion

Historic rehab grants present real estate investors with unique opportunities. That is, if the investors do their homework. You must understand both the application process, and the requirements and restrictions these kinds of projects entail.

By exploring available grant opportunities, preparing comprehensive proposals, and consulting with preservation professionals, investors can do their part to preserve our nation’s history — and see some profit in the bargain.

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