Can't Afford Home Repairs in Texas? What to Do First

Suppose Wendell owns an older house in Texas. The roof is wearing thin over the back bedroom, the air conditioner runs all afternoon and the rooms never quite cool, and a bucket waits in the back bedroom for the next hard rain. The repair estimates are folded in an envelope he would rather not reopen. Wendell can't afford home repairs on that scale right now.

This guide is general information, not legal or tax advice; an attorney can apply it to your situation before you sign any lien contract.

If that envelope looks familiar, the steps below take it one question at a time.

Sort the repairs that can't wait

Say Wendell starts with a notepad and a slow walk through the house. The goal is not a budget yet. It is three short lists:

• Now. Anything that puts people at risk or lets damage spread: water coming through a ceiling, sewage backing up into a drain, a gas smell, sparking outlets, or no safe way to heat or cool the house in extreme weather.
• Soon. Problems that cost more the longer they wait, like a roof that keeps losing shingles or an air conditioner that keeps breaking down.
• Later. Things that bother you but don't make the house less safe: worn carpet, dated counters, a door that sticks.

Next to each item, note what it is doing now and what could happen if it waits. That one page is what you show an adjuster, a repair program, a lender or a buyer. The first list matters in another way, too: Texas homestead law and some repair programs treat health and safety repairs differently, as the sections below show.

Can't afford foundation repair?

A slab or pier problem goes through the same sort: is it getting worse now, or holding for the moment? An engineer's report can answer that before any contractor's bid does. The Texas Department of Insurance lists earth movement among the damages most policies don't cover, so don't count on a claim without reading your policy. If a foundation company offers to finance the work with a lien on the house, the homestead rules below apply to that contract too. If selling is on the table, see our page on selling a house with foundation issues in Texas.

Check insurance before you pay out of pocket

Now say Wendell digs the homeowners policy out of a kitchen drawer. Whether it helps depends on why the roof and the air conditioner are failing.

The Texas Department of Insurance home insurance guide lists wear and tear among the damages most policies don't cover, along with a continuous water leak, termites and flooding. Sudden events are different: most policies cover fire, a sudden and accidental release of water, and, except on the Gulf Coast, windstorm, hurricane and hail. Coverage varies by company. A roof that simply wore out is usually the owner's cost. A roof a hailstorm tore up may be a claim.

If a covered event may be to blame, TDI suggests:

• Tell the company as soon as possible. Most companies have deadlines, and some policies have a one-year deadline unless you can show good cause for the delay.
• Take photos or video of the damage before any repairs.
• Make only temporary repairs, like a tarp over the roof. The company might deny the claim if you make permanent repairs before it sees the damage.
• Check whether your policy pays replacement cost or actual cash value. Actual cash value subtracts depreciation for wear and age, so an older roof brings a smaller check.

For a failing sewer line, TDI lists coverage for backup of sewers or drains among common add-ons, so check whether your policy has it.

Home repair assistance in Texas: who qualifies

Say the policy won't cover Wendell's roof. The next stop is help that doesn't have to be paid back, or costs very little. Texas has some, but the rules are narrow and the money can run out.

• Start with the state's directory. On its Help for Texans page, the Texas Department of Housing and Community Affairs (TDHCA) lists local home repair and weatherization providers by city or county. TDHCA sends its funds to those providers and does not take applications from individuals. It warns that providers may be at capacity and suggests asking your city or county if none is available. It also points to 2-1-1 Texas for other local help.
• Weatherization. TDHCA's Weatherization Assistance Program helps low-income households lower energy costs, through local agencies that together cover all 254 Texas counties. The work can include tune-up, repair or replacement of inefficient heating and cooling systems, which makes it worth asking about for Wendell's air conditioner.
• Accessibility. The Amy Young Barrier Removal Program offers one-time grants of up to $22,500 for households that include a person with a disability, to improve accessibility and remove hazardous conditions. Household income can't exceed 80% of the area median family income, and the program isn't offered in every part of Texas.
• Rural homes. USDA's Section 504 program, governed by 7 CFR Part 3550, Subpart C, helps very low-income owner-occupants in designated rural areas repair their homes. Loans carry 1 percent interest over 20 years. Grants go only to owners 62 or older, and only to remove health and safety hazards or make the home accessible. Applicants must be unable to get credit or help on reasonable terms elsewhere.

Borrowing for home repairs against a Texas homestead

Now say a roofer offers to finance the job with a lien on the house, or Wendell wonders about a home equity loan. Texas guards a homestead closely, and these rules decide whether a repair lien is even valid.

The Texas Constitution, Article XVI, Section 50 protects a homestead from forced sale for debts, except a short list. A lien that doesn't secure one of those debts is not valid (Section 50(c)). Repair work makes the list only if the contract meets Section 50(a)(5):

• The work and materials are contracted for in writing, with both spouses' consent on a family homestead.
• You don't sign the contract before the fifth day after you make a written application for credit for the work.
• The contract says you may cancel without penalty or charge within three days after everyone signs.
• You sign only at the office of the third-party lender making the loan, an attorney or a title company, not at the kitchen table.

The five-day wait and the three-day cancellation right don't apply to immediate repairs of conditions that materially affect the health or safety of the people living there, if you acknowledge that in writing, so read any such form slowly.

For a contractor's lien on a homestead, Property Code Sec. 53.254 adds that the contract must be signed before work starts, by both spouses if you are married, and filed with the county clerk. Under Sec. 53.255, the contractor must give you a disclosure statement before you sign a contract to repair your home; it says a contractor may not require you to sign your property over as a condition of the work. A home improvement contract covered by Property Code Sec. 41.007 must also print a bold warning that includes this sentence:

If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home.

Take that sentence at its word. A valid repair lien is one of the few debts a Texas homestead can be sold to pay.

A home equity loan is the other route. On a homestead it must meet Section 50(a)(6), including a cap: the new loan plus all other debt secured by the house can't exceed 80 percent of its fair market value. Our guide to Texas home equity rules covers the rest. If the mortgage is already slipping, start with our guide for homeowners behind on mortgage payments in Texas.

When the repair math says sell

By now Wendell has the whole picture on one page: what can't wait, what the policy won't pay, which programs might help, and what a loan would cost each month. Say the numbers still come up short. Then selling belongs on the list next to fixing, borrowing and waiting.

Selling may fit better when:

• you can't afford home repairs on the now and soon lists, and a new loan payment would stretch a tight budget;
• repair programs are out of funds, or their income, age or location rules leave you out;
• you would rather not manage contractors on a house you may leave anyway.

Selling as-is generally doesn't end the duty to disclose under Property Code Sec. 5.008, which our guide to selling a house as is in Texas explains. Our page on how to sell a house that needs repairs compares fixing first, listing as-is and selling for cash, and our net proceeds calculator puts listing and cash side by side.

That is where Wendell's question rests: not whether selling is good or bad, but which path leaves room to breathe.

If selling fits better

Cash Home Advisors buys houses in Dallas–Fort Worth, Houston, San Antonio and Austin. You sell as-is, no repairs, and there are no agent commissions. We pay all closing costs.

A cash offer is usually less than the house could bring on the open market after repairs, so if you have the time and money to fix it first, listing can net more. If you can't afford home repairs and want to see what a cash sale would look like, asking is free, no obligation, and a real person calls you back. Request a cash offer, or read how our process works first.

Frequently asked questions

Sources

1. Texas Constitution, Article XVI, Section 50 (homestead; Secs. 50(a)(5), 50(a)(6) and 50(c))
2. Texas Property Code, Chapter 53 (Secs. 53.001, 53.254 and 53.255, liens on a homestead and the residential construction disclosure)
3. Texas Property Code, Chapter 41 (Sec. 41.007, home improvement contract warning)
4. Texas Property Code, Chapter 5 (Sec. 5.008, seller's disclosure of property condition)
5. Texas Department of Insurance, Homeowners insurance guide
6. Texas Department of Housing and Community Affairs, Help for Texans
7. Texas Department of Housing and Community Affairs, Weatherization Assistance Program
8. Texas Department of Housing and Community Affairs, Amy Young Barrier Removal Program
9. 7 CFR Part 3550, Subpart C, Section 504 loans and grants (eCFR)
10. 2-1-1 Texas, Texas Health and Human Services Commission

General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.