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Roof Financing Options

Written by Allison Martin

Allison Martin is a personal finance enthusiast and a passionate entrepreneur. With over a decade of experience, Allison has made a name for herself as a syndicated financial writer. Her articles are published in leading publications, like, Bankrate, The Wall Street Journal, MSN Money, and Investopedia. When she’s not busy creating content, Allison travels nationwide, sharing her knowledge and expertise in financial literacy and entrepreneurship through interactive workshops and programs. She also works as a Certified Financial Education Instructor (CFEI) dedicated to helping people from all walks of life achieve financial freedom and success.

Updated January 25, 2024​

3 min. read​

Do you need to repair or replace your roof but don’t have enough cash on hand? There are several roof financing options to choose from, including personal and home equity loans, government-backed loans, credit cards, and in-house financing with a roofing company.

In this guide, you’ll learn how each method works and a viable alternative to financing a new roof.

The Benefits of Financing Your Roof Improvement or Replacement

It may be tempting to pay cash for your roof improvement or replacement if you can. But is it a smart financial move? You can possibly save a bundle in interest. Still, financing may be the better option if you prefer to capitalize on these benefits: 

Keep Your Savings Intact

The cost to repair a roof improvement or replacement can place a big dent in your emergency fund. However, financing the project allows you to keep your savings intact as you won’t have to pay the total bill upfront. Instead, you’ll make payments over time until the balance is paid off. 

Affordable Monthly Payments 

Depending on the financing option you select, you could get low monthly payments that easily fit into your budget. By breaking down the costs into small chunks, you can have peace of mind knowing you can comfortably afford the cost of your roof improvement or replacement. 

Roof Financing Options

Here’s a breakdown of options available to finance your roof improvement or replacement, along with the key benefits and drawbacks of each. 

1. Get a Personal Loan

A personal loan marketed as a home improvement loan allows you to pay for roof repair or replacement costs without putting your home up for collateral. The application process is generally straightforward, and it doesn’t take long to receive a decision. 

However, these products often come with a high interest rate and a short repayment period. Consequently, the monthly loan payments could be steep if you borrow a hefty amount.

2. Put it on Credit Cards

Credit cards could be a viable option if you qualify for a card with a 0 percent promotional APR offer. The trick is to pay the card off before the interest-free window ends – usually between 12 to 18 months. 

Otherwise, you’ll be stuck paying a steep interest rate on the repair or replacement costs. And suppose you only make the minimum monthly payment. In that case, you will likely spend several hundred or thousand more to finance the roof. 

3. Get Financing from a Roofing Company

Some roofing companies offer in-house financing to alleviate the stress of paying for repairs or a replacement at once. The interest rate and payment terms vary by lender, so inquire about this option and read the contract carefully before moving forward.

4. Get a HUD Home Improvement or Repair Loan

There are a few government-backed home renovation mortgage products to choose from:

  • Fannie Mae HomeStyle Loan: You can use this loan to purchase and renovate your primary residence, secondary residence, or investment property. It allows you to borrow up to 75 percent of the home’s after-renovation value on top of the purchase price.
  • FHA 203k Rehab Mortgage: These loans let you roll up to $35,000 into your mortgage to make repairs, improvements, or upgrades to your home. You must get approval from an FHA appraiser (and possibly a HUD consultant) before completing improvements. Also, you are required to use a licensed contractor, complete extensive paperwork, and meet a series of FHA 203(k) specific requirements. 
  • FHA Title I Property Improvement Loan: You can use this loan in conjunction with a 203(k) loan without refinancing your existing mortgage. Loans are limited to $25,000 and $60,000 for single and multi-family homes, respectively. 

While these options may seem ideal, it’s important to consider the implications they have for your existing mortgage. Although you may qualify with a lower credit score, you’ll likely have to refinance, which could result in a higher interest rate and more costly monthly mortgage payments. Plus, the financing process tends to be more cumbersome and lengthy. 

5. Get a Home Equity Loan or HELOC

A home equity loan or home equity line of credit (HELOC) lets you tap into your home’s equity to get the funds you need to cover roof repair or replacement costs. Depending on your income and credit rating, you can possibly borrow up to 90 percent of your home’s value minus your outstanding mortgage balance.

Unfortunately, this option isn’t feasible if you haven’t been in your home for an extended period or if market conditions have changed and hurt your property value.

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