Red flags
While some people can find money for home improvements through government grants, others lose money by falling prey to numerous scams that lure consumers with the promise of free government money. "What we're hearing about is people getting phone calls from somebody claiming to be from the government and offering them a grant for some purpose, and some of them are these home improvement deals," says Susan Grant, director of the National Consumers League's Fraud Center. If you get such a call, beware. The government does not call people to offer free money. "That's the red flag," Grant says.

In some of these scams, homeowners are told they will receive information about grant money for a fee or if they submit personal information. Some scammers even ask for checking account information so they supposedly can deposit grant funds directly. Natural disaster zones with widespread property damage, like neighborhoods ravaged by tornadoes or hurricanes, are particularly vulnerable to con artists, who sometimes call promising government aid because of the disaster.

The best way to protect yourself is to arm yourself with knowledge.

Know the process
The federal government rarely gives grant money to individuals. Instead, it generally disburses funds to local authorities and nonprofit organizations, so any home improvement grants you may be eligible to receive will typically come from the local level.

Needs vs. wants
Just as the government is not going to fund your dream vacation, it is not going to pay for your dream home, either. If the improvements you want to make are necessary for safety, and you qualify, there may be some money out there for you. If you're hoping to add a little more luxury to your life, the government will not be your banker.

If it sounds too good ...
Be wary of anyone who offers you money or to help you find "free" government money. If someone claims to represent the government, ask what agency they work for and tell them you'll call them back. Then look up the phone number for the agency and contact it to find out whether the caller was in fact authorized by the agency.

No strings
If you are the recipient of a legitimate grant, you're on the receiving end of the exchange, not the giving end. In other words, don't pay someone money in order to get funding promised by a grant. If one of the stipulations of receiving grant money is a financial investment on your part, contact local authorities and the National Consumers League's Fraud Center instead.