Ready To Buy a Home?
Get Approved to Buy a Home
Rocket Mortgage® lets you get to house hunting sooner.
Whether a charming neighborhood or a unique property catches your eye, there are many reasons people fall in love with historic homes. But before you put in an offer, there are some key ownership differences you should be aware of.
We’ll explain what makes a home historic, the special considerations for owning one and the pros and cons of doing so to help you decide if a historic home is right for you.
What Is a Historic Home?
The National Park Service is responsible for overseeing the National Register of Historic Places. It is the official list of America’s historic places deemed worthy of preservation. Historic homes are listed in an online database.
The program comes from the National Historic Preservation Act of 1966, which authorized the Secretary of the Interior to identify and recognize properties of national significance. The legislation expanded the Secretary’s authority to recognize properties with local and state significance.
The mission of the program is to coordinate and support public and private efforts to identify, evaluate and protect America’s historic and archeological resources.
What makes a house historic?
Just because a house is old doesn’t mean it qualifies as being historic. For a property to be added to the Register of Historic Places, it must meet the National Register’s criteria for evaluation.
The National Park Service splits these criteria into two main sections:
Age and integrity: The property must be at least 50 years old to qualify. It should also look similarly to the way it did in the past.
Significance: The property has something to do with events, activities or developments that were important in the past. This can include the lives of historic figures. Archeological investigation can reveal new information about the past.
Essentially, if a property is at least 50 years old, still looks mostly the way it did and has some connection of historical significance, it stands a good chance of making the list.
Take the first step toward buying a home.
Get approved. See what you qualify for. Start house hunting.
Special Considerations for Buying a Historic Home
While the home buying process for historic homes is largely similar to homes without this designation, there are some key differences you should be aware of.
- Markets can be more competitive: Historic homes are often found in historic districts. These tend to be desirable neighborhoods, so competition can be even fiercer than the normal housing market. Also, you’ll likely be bidding against people who may be willing to pay more out of personal attachment to the local history and investors with more cash who are interested in potential property appreciation.
- Rules are set locally: A common misconception is that the rules for historic homes are federally mandated. Instead, restrictions on modifications that can be made are set at the local and state level. Contact your State Historic Preservation Office (SHPO) to learn about the rules in your desired area.
- Part of community history: Being a part of a community’s history and heritage can be wonderful. But it can also come with some drawbacks, like higher foot traffic, as historical districts tend to attract a lot of tourists. It can also mean more direct attention, like people stopping to take pictures of your home or knocking to ask if they can look inside.
Should You Buy a Historic Home?
To help you decide if a historic home is right for you, we’ve put together some pros and cons to consider.
Historic homes tend to come with lots of character and charm. In addition to the aesthetics, there’s a connection to the past that you can’t get with new construction. When you buy a historic home, you become part of a story that’s larger than yourself.
Historic homes may have the potential to appreciate faster than other homes. Once you get your planned renovations approved, it could be good news in terms of potential return on investment (ROI).
To offset the costs associated with renovating a historic property, many states offer tax incentives and grants. Your SHPO will be able to provide more information on state-specific assistance.
This depends on the rules where the property is located. While some districts have little to no restrictions, others will review proposed renovations to make sure the historic character of the home remains intact. This can include restrictions on exterior renovations, like the style of roof, windows, porches or columns.
To keep your property maintained to community standards, you might need to use historically accurate materials. This can be more expensive, and it can also be difficult to find contractors who have the necessary expertise to perform these types of renovations.
Insurance companies may be more reluctant to sell you homeowners insurance because of the additional costs associated with repairs and replacements. You may also have to pay more for your insurance as a result.
Next Steps for Buying a Historic Home
If you think a historic home might be right for you, here are some ideas to help you kickstart your search.
- Do your research: Find the area where you want to buy a property and research the market. It’s also worth contacting your SHPO to understand the limitations on renovations and get an idea for any tax breaks or grants you could apply for.
- Budget for renovations: When deciding on how much you want to put down, keep in mind the cost for renovations. It may be worthwhile to keep some of your cash liquid to jumpstart renovations, or you could consider applying for a renovation mortgage loan.
- Shop lenders: If you’re financing your purchase, it’s worth taking the time to talk to multiple lenders. Some of them might offer different loan types, and you’ll also be able to compare interest rates. This can save you thousands of dollars over the life of the loan.
You should ask about local and state rules for renovations to understand what you’ll need to do to maintain the property and what changes you’ll be able to make. You should also do your best to find out what kind of shape the home is in beforehand. This includes doing a home inspection.
The competition to get a historic home can be fierce, so you may need to win a bidding war for the property. Maintenance and repairs can also be costly because of the materials and skills involved. There may also be restrictions on what renovations you’re allowed to do.
Generally, a house needs to be at least 50 years old to meet the National Registry criteria for a historic home.
Historic Homes Offer a Unique Opportunity
Owning a historic home is different compared to other types of homes. While you get the benefit of the character and connection to history, it comes with tradeoffs in the form of restrictions on renovations and costlier maintenance. For some, this tradeoff will be worth it, while others might prefer the comforts of a newer home.
Home is worth it.
The mortgage process can be exciting, and we’ll be with you all the way. Take the first step to owning a home. You’ll be glad you did.
The Short Version
- For a property to meet the criteria to qualify for the National Register of Historic Places, it must be at least 50 years old, retain aesthetic integrity and be of historic significance
- Rules for historic home renovations are set at the state and local level. You may also be eligible for tax breaks and grants. Contact your State Historic Preservation Office (SHPO)
- While historic homes tend to appreciate faster than other homes, renovations tend to take longer and cost more because of the skill and materials required
National Park Service. “How to Apply the National Register Criteria for Evaluation.” Retrieved April 2023 from https://www.nps.gov/subjects/nationalregister/upload/NRB-15_web508.pdf
National Park Service. “How to List a Property.” Retrieved April 2023 from https://www.nps.gov/subjects/nationalregister/how-to-list-a-property.htm