HUD and the FHA have teemed up with lenders as well as with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203(k) with other financial resources, such as HUD's HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers.

While HUD and the FHA are federal government programs, most of the grant programs that fall under Section 203(k) are financed through the state or local governments. Thus, several state housing finance agencies have designed programs, specifically for use with Section 203(k) and in order to get a grant for home repair you must go through your state or local government.

Most home repair grants are only available to lower income communities and to help meet their responsibilities under the Community Reinvestment Act (CRA). Some properties are ineligible for home repair grants because they do not fit the specific guidelines or are not located in the specific neighborhoods and communities being revitalized. In most cases, to be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year.

Everything has to meet the provisions of local zoning requirements. And if anything else has been built on the property or added, and you want that covered with the grant repair monies, it must be attached to the existing dwelling. Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.

Some home repair grants can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling. Or for the opposite when an existing multi-unit dwelling could be decreased to a one- to four-family unit.

When it comes to home repair grants, the amount of money you can get, and the things that can be repaired will vary from state to state, and even from community to community. If your local government allocated $25k for home repair grants, and you are the only person in the area that meets the restrictions and qualifies for a grant, you are likely to receive more money than an area where it is well publicized that grant monies are available, and multiples of people apply and qualify to receive funds. So, check with your local state and city governments to find out what kind of home improvement and repair grants are available to you.