How to finance aging in place renovations: A fully accessible guide

Couple reading paperwork in the middle of kitchen renovation

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In a 2018 study, AARP found that 76 percent of people ages 50 and older would prefer to stay in their own homes as they age. It’s a process known as aging in place — one in which seniors retrofit their properties to accommodate growing older, rather than moving out to an assisted living facility, nursing home, or in with a loved one.

Staying in your own home as you grow older offers many benefits. For most, it means a stronger sense of safety, comfort, and independence, and it also affords you more privacy. Though the renovation costs may be high, aging in place can often be cheaper than an assisted living facility would be — especially if you plan ahead.

For a room-by-room guide on aging-in-place renovations, check out AARP’s HomeFit Guide.

For the budget-minded homeowner, there are a number of ways to finance the aging in place process, including:

  • Home renovation loans
  • Home equity loans/home equity lines of credit (HELOC)
  • Reverse mortgages
  • Government grants and loans

It is best to begin planning for aging-in-place renovations early, long before you retire. If you haven’t started planning just yet, there are still financial steps you can take in order to remain in your home. This guide breaks them all down.

What’s your current situation? Choose an option below.

I’m still employed, and I haven’t retired yet
I’m retired and on a fixed income
I’m moving in with a family member

I’m still employed and I haven’t retired yet

Best for you: home improvement loans or home equity loans/HELOC

If you’re still employed but considering aging in place, now’s the time to start planning. If you own a home, you’ll want to start making the property more accessible as soon as possible. Ideally, you can spread your renovations out over time to reduce the costs and hassle, but depending on your age and retirement timeline, you might need to do several renovations at once to ensure your property is ready.

A quick caveat here: Renovating your home for old age doesn’t have to mean a cold and clinical design. In fact, it’s usually better to integrate aging in place into other home improvement projects than to do them one-off. This way you can have the interior design you want, while also improve your home’s accessibility in step (this also helps ensure your home’s value and marketability when you’re ready to sell it). 

For example, let’s say you’re redoing the cabinets in your kitchen. Perhaps you could consider replacing the knobs with D-shaped pulls to make gripping easier as you age. Small steps like that can help prepare for larger aging-in-place renovations in the future.

Financing those renovations 

Most people reach their peak earning years in their 40s. If you’re in that sweet spot, your credit score may be the highest it’s ever been, and you also may have the most equity in your home. If that’s the case, then your two best financing options for aging-in-place renovations are home improvement loans and home equity loans. 

Home improvement loans are personal loans taken out specifically for funding home renovations. These loans are unsecured and rely entirely on your credit score and credit history. You won’t have to tap into your home’s equity, nor put your home at risk. But since home improvement loans are unsecured, interest rates are generally higher on than home equity products.

Home equity loans and HELOCs do turn your home’s available equity into cash, which you can then use toward renovations or whatever other expenses you’re dealing with. Since they’re secured by your home, the interest rates should be lower than on home improvement or personal loans.

Home improvement loans work best for short-term expenses and small amounts you know you can repay quickly. Home equity loans and HELOCs usually come with repayment periods of anywhere from 15 to 30 years. If you are at all unsure if you will continue to live in your home past retirement, but still want to plan just in case, we recommend a home improvement loan

I’m retired and on a fixed income

Best for you: home equity loan/HELOC, government assistance, reverse mortgages

If you’re currently retired, you may already be in need of some accessibility renovations, like non-slip flooring (especially in the bathroom), grab bars around the toilets, a ramp or wider door for your walker, or a low-rise tub or shower with a no-step entry. But how can you finance these renovations?

If you’re like many retirees, Social Security might be your only source of steady income. Though this could make it difficult to fund your necessary accessibility improvements, it’s not impossible by any means. 

Your best option may be to utilize the equity you’ve built up in your property or consider a reverse mortgage, also called a home equity conversion mortgage. Be sure to examine your savings before taking out any loan that taps into your equity, as it puts your home at risk. You may be able to pay for some renovation costs up front, while still ensuring you can live comfortably in the future.

If you choose to tap into your home’s equity, make sure you plan to remain in your home for as long as possible. Home equity loans and HELOCs have an average lifespan of 15 to 30 years, and a reverse mortgage will come due when the borrower either dies, sells the home, or permanently moves out. (Basically? They’re long-term loans — not short-term ones).

You may also consider an FHA-backed improvement loan, like a Title 1 Property Improvement Loans or a 203(k) loan. Because each loan is insured by the federal government, you’ll likely get a lower rate than you would on other improvement loans or personal loans.

I’m moving in with a family member

Best for you: Proceeds from your home sale, personal loan, low-interest credit card

Best for your loved one: Home equity loan/HELOC

Moving in with a family member or loved one may mean you have fewer options for customizing your living space. It may not be the most ideal for aging in place, but gives you the chance to live with your loved ones and have a home within a home. To start, talk with your loved one about potential renovations they might allow to make the property safer and more accessible.

The most important changes will be in the room or suite you’ll be staying in. These can include things like:

  • Installing motion-activated lights or lighted switches
  • Switching out doorknobs for levers
  • Replacing tile with carpet or other non-slip flooring options
  • Widening doorways for walkers and wheelchairs
  • Removing blinds and hanging light window coverings to maximize natural light
  • Installing handrails on or near the bed

If they’re amenable to these smaller updates, you may also want to speak with your loved one about renovating any common areas. Open shelving in the kitchen, grab bars in the bathrooms and a ramp at the front stoop can all be small but effective adjustments to help you age safely in your new home. Lowering the sinks and countertops is also a good idea if possible.

Naturally, you’ll want to help your loved one pay for these renovations or cover them in full. If you’re selling your home before move-in, the sale proceeds can go toward any renovation costs you might encounter. If you’re not selling a property, you may consider a personal loan or a low-interest credit card to cover the costs.

If you’re on the other end of the equation — and an aging loved one is moving into your existing home — then carefully consider the space in which they’ll live. If you don’t have a dedicated room they can stay in, then you might consider adding a mother-in-law suite or accessory dwelling unit on the property.

If you do have an available room, make an effort to improve its accessibility before they move in. The small changes above are a great place to start, as are updates to the bathroom they’ll be using. These can include:

  • Adding a fold-down seat in the shower
  • Installing handheld showerheads
  • Adding grab bars in the bathtub and around the toilet
  • Putting non-slip mats or tread in showers and tubs
  • Installing a taller toilet

A home equity loan can help you cover the costs of these improvements, as well as any your loved one may require later as they age. You may also consider a home equity line of credit, depending on your financial situation.

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