The last few weeks have been rough on banks, financial lending institutions and other companies which typically loan out money to homeowners for all sorts of loans, including loans that can be used for home improvement. The economic downturn has crushed the housing market and, by extension, the home improvement industry and markets as well.

The simple fact is that many people lost a lot of their home equity with the collapse of the housing bubble and now many larger banks are stuck in a cycle of distrust when it comes to lending money to consumers and even each other.  This means that if you need financing for a home improvement project or you need to borrow money to fix something in your house you may find that traditional big name mortgage and equity companies as well as national banks may not be able or willing to work with you.

There is hope, however.  There are still some ways you can borrow the money you need to improve or add to your home without having to worry too much about the economic crisis that is hitting many institutions across the country.

Local Banks

Many of the national banks have been hit hard because they either directly or indirectly invested in subprime lending products which are now evaporating in value.  Many small local banks avoid investing in risky enterprises and therefore are still doing very well.  Local banks are more willing to help customers with home improvement loans because it’s helping community members improve the neighborhood and overall community, which leads to more people staying near the bank and using its services in the future.

Home Improvement Store Credit Cards

Big box hardware stores are suffering and need people to buy their products and keep their stores in business.  One way they can sell more items is to offer competitive rates on their credit cards to keep people coming into their stores.  Because these cards can often only be used at the stores that issued them these cards basically ensure that the hardware store will do well. Some hardware store credit cards like The Home Depot credit card even has a 0% interest rate for a limited time, so they are definitely worth looking into.

Financing Through Construction Contractors

When the number of home improvements are down due to a slow economy some of the people who suffer the most are the people who make a living working and improving homes.  Roofers, electricians, plumbers and even landscapers are all reporting lower sales.  Many of these contractors and self-employed workers will gladly offer payment plans to you for their services.  They would rather be paid a little bit over each month and get the job of working on your home than risk not getting any work at all because no one can afford their services outright.  Each contractor is different, obviously, but you’d be amazed at how flexible some home improvement professionals can be when it comes to payment.

Bartering

There are actually a lot of private individuals and even companies who are turning to bartering more and more as a way making a living and stay viable. For smaller jobs bartering services or even products can be a great way to have someone repair your home without actually spending any money. I have an elderly lady who essentially bartered here way into having a contractor replace all the windows in her home over the course of a year or so. She worked out a system where she would prepare meals for her contractor neighbor three times a week and in exchange he would do minor repairs around her home and keep and eye out for any materials he might find being thrown away. Sure enough he was working on a job where the wrong windows were ordered and they were put aside to be destroyed (for large jobs it’s often not worth sending things back). He was able to talk to the owner of the project who agreed to give him the windows. Several weekends later he installed them in the elderly neighbor’s house much to her surprise.

Just because the economy is taking a downturn doesn’t mean you can’t still improve your house and live in the home of your dreams. You need to think a little more creatively and outside the box, but you can definitely find some great ways to afford those home improvements even if we are in an economic recession.