Many homeowners are seeking to increase the value of their home through upgrades, remodeling and improvements. Many of these homeowners wish to accomplish these improvements through government programs like the EEM loan or FHA 203k loan, which are designed to assist owners with the rehabilitation of a home. EEM (Energy Efficient Mortgage) loans are designed to help finance the costs of converting a home to higher energy efficiency through appliance or window upgrades while the FHA 203(k) loan is meant to provide funding for home rehabilitation such as repairing leaking roofs, replacing heating systems, etc… While these two loans can assist the financing of several home repairs and improvements, not all improvements are covered by these mortgage loans.

We are often asked which improvements will increase the resale value of a home and if those upgrades will be covered under the 203(k) or EEM loans. To help answer these questions, we thought we’d list the top five home improvements that don’t improve the resale value of a home and aren’t covered by government home repair programs’.

1. Adding a Pool

Many homeowners feel that installing a pool on a home’s property will raise the value of the home while providing an excellent selling point to potential buyers. However, while this is a common thought, it is a myth. Many home buyers don’t wish for the responsibility that accompanies the upkeep of a pool and families with smaller children often stay away from homes with a pool for safety reasons.

2. Installing a Sport Court

It doesn’t matter if a property has a tennis court or basketball court, most buyers don’t care for the limited backyard a sport court can provide. Experts say that homes with sport courts typically remain on the market a year longer than similar homes without backyard courts while only recouping 10% or less than the cost it took to install the court.

3. Specialized Hobby Rooms

As a homeowner, it may be highly appealing to convert a spare bedroom into a pottery, painting or brewery room but as far as resale value, these improvements do little to raise the value of a home. These specialized hobby rooms can actually remove value from the home, ensuring it remains on the market several monthly longer than similarly priced homes.

4. Adding Carpeting

Carpeting flooring is becoming less popular due to allergies and the chemical processes used to install and manufacture the carpet. However many homeowners feel that by installing new carpet they can improve the value of their home. In most cases, the removal of carpet and installation of hard flooring increases the resale value of a house more than adding carpeting.

5. A Mudroom

Mudrooms have been a trend in home building for a few years now and many homeowners feel that a conversion of an entryway or side room to a mud room will attract buyers and improve the resale value of a home. However, this is not the case. Homeowners will do better to provide a completed basement or garage over the installation of a mud room.

Common Sense with Government Loan Programs

The improvements listed above are considered frivolous and in most cases a homeowner can assume that any upgrades they wish to have assistance with through EEM or 203(k) loans will require more common sense. In many cases, the improvements that are approved by a mortgage lender and these government programs can boost the value of a home while ensuring the best living conditions as well as energy efficiency.

Leave a Reply

Your email address will not be published. Required fields are marked *