How To Get Federal Financial Aid to Rehabilitate Historic Buildings
The designation of historic sites and the documentation of history through images, audio, photographs and oral histories can be accomplished through historic preservation efforts.Major renovation of the interior of a historic building can be costly and often requires preservation and rehabilitation of both the exterior and interior so that the building is used and maintained for commercial purposes or as a private dwelling.Federal tax credits can be used to offset the cost of historic preservation rehabilitation.They can apply for grants from the federal, state and local governments.Before beginning a rehabilitation on a historic building, it is important to investigate the types of funding available.
Step 1: Consider the National Preservation Tax Incentives program.
Historic-building preservation is supported by the U.S. government.The rehabilitation of historic structures is supported by the Federal Historic Preservation Tax Incentives program.The goal of the program is to help rehabilitate abandoned or underused schools, warehouses, factories, churches, retail stores, apartments, hotels, houses, and offices.The National Park Service and the IRS administer the program.The rehabilitation tax credit can reduce one's federal income tax by 20% of the amount spent on a certified historic structure.This is a reduction in taxes.Since 1976, this program has helped preserve more than 40,000 historic properties in the U.S.
Step 2: The 20% tax credit is a requirement.
Only buildings that have been deemed historic by the National Park Service are eligible for the 20% tax credit.The credit can't be used for owner-occupied, residential properties.The credit can be used to rehabilitate properties used for commercial, industrial, agricultural, or residential purposes.A homeowner can apply for help with the rehabilitation of a portion of their home if it is used for business.
Step 3: Determine if the property is a certified historic structure.
If the building is listed individually in the National Register of Historic Places or if it is located in an area that is a registered historic district, it can be considered a historic structure.If the building is not currently listed on the National Register or is located in a current historic district, the owner can request a preliminary determination of historical significance.Part 1 of the Historic Preservation Certification application can be used to make this request.The application can be found on the website.
Step 4: Comply with the requirements for certified-rehabilitation.
The National Park Service must approve the rehabilitation plans and certify the finished project for an owner to receive the 20% tax incentive.A certified rehabilitation is one that is consistent with the historic character of the property and the district in which it is located.The buildings will be rehabilitated in a way that allows for efficient commercial use.The building's historic significance must not be damaged or destroyed during the rehabilitation.
Step 5: Take a picture of the building.
It's important that you take a picture of the entire building before you start the project and again once you're done.The photographs are necessary for your project to get final approval.
Step 6: You need to apply for the tax incentive program.
You should discuss your project with the State Historic Preservation Office before you start the rehabilitation.You can download the Historic Preservation Certification application from the website of the National Park Service.You should submit the application in the early stages of your project planning.You should not start any rehabilitation until the project is approved in writing.There are three parts to the application: Evaluation of Significance, Description of Rehabilitation, and Request for Certification of Completed Work.The relevant parts of the application will be submitted at different points in the rehabilitation process.
Step 7: The application fees need to be paid.
All applicants have to pay a fee.The fees are charged for the reviews of the proposed project and the completed project, as set forth in the application.Fees are based on how much rehabilitation is planned.You don't have to pay the fee until NPS asks for it.You have to pay your fees before the decision can be made.The fee schedule can be found on the website.
Step 8: Meet IRS requirements.
In order to be eligible for the 20% rehabilitation tax credit, applicants must meet the requirements of the IRS.The building must be used in trade or for the production of income if it is to meet these requirements.During the two-year period of rehabilitation, the expenditures must exceed the adjusted basis of the building and its structural components if they are to be substantial.The building is currently being used for income-generation purposes because it has to be placed in service.The expenditures should be considered rehabilitation expenditures.Expenditures include the cost of work on the building, as well as fees for engineers and architects, site-survey fees, legal expenses, and other construction-related costs.The building of a new addition or the provision of parking lots are not included in qualified rehabilitation expenditures.
Step 9: You can claim your tax credit.
You can apply for a 20% tax credit once you have received your certification.For the tax year in which the rehabilitated building was put into service, you must complete IRS form 3468.Part 2 of the application must be included with your tax filing if you haven't received your certification yet.The tax credit will be denied if the project is denied certification.
Step 10: For at least five years, keep ownership of the rehabilitated building.
You must maintain ownership of the building for at least five years from the time it was placed in service in order to be eligible for the IRS tax credit.If you sell the building within a year, you have to repay the entire tax credit.The tax credit is reduced by 20% for each year less than five that you hold the property.
Step 11: Determine if you are eligible for a federal grant.
Only nonprofits and public agencies can receive historic-preservation grants from the federal government or the National Trust Preservation Fund.You would not be eligible to apply for historic-preservation grants if you register as an individual through the federal grant website.You can apply for federal preservation grants if you are a nonprofit organization, a public agency or a native-American tribal government.
Step 12: You have to apply for a DUNS number.
You need to apply for a nine-digit Dun & Bradstreet identification number to register with the federal grant website.You can register over the phone or call to apply for the number.You can register on the website.
Step 13: You have to register with the SAM.
You must register your organization with the System Award Management if you want to get a DUNS number.On the SAM website, you can register.You will be required to give your organization's name, authorized official, and Employer Identification Number.
Step 14: You have to create a password on Grants.gov.
You can register with Grants.gov once you have registered with SAM and obtained your DUNS number.You will have to submit your DUNS number when you register.You will be able to create a usernames and passwords for your Grants.gov account once this number has been verified.The process for registration can be completed in a day.You will have to change your password every 60 days.
Step 15: Search for grants.
If you register with Grants.gov, you can search the website for historical-preservation grants.You can search for historic preservation and building on the website.Grants can be used for the rehabilitation of historic buildings.You can review the specific application requirements of each grant to see if you are eligible after you have identified a list of possible grants.The first page of each grant description usually contains an overview of the grant and a description of who is eligible to apply.If you meet eligibility requirements and the grant provides funding for the type of rehabilitation you're proposing, you should finish applying.
Step 16: Consider a challenge grant.
The Challenge Grant is funded by the National Endowment for the Humanities.Grants are used to help agencies secure funding for humanities programs.Under special circumstances, the grant can be used to support construction and renovation projects.It is important for you to review the requirements regularly to see if your organization qualifies for funding.You can find the eligibility requirements on the NEH website.
Step 17: Eligibility for National Park Service grants should be reviewed.
Matching grants are provided by the NPS for the protection of historic properties.Some states work with nonprofits to rehabilitate historic-preservation sites.If you're interested in applying for a National Park Service grant, you should contact your organization to see if it works with them.You should check out the Grants.gov website to see if your project is eligible for grants.The National Park Service has a list of State Historic Preservation Offices.
Step 18: Become a member of the National Trust Preservation Fund.
Grants that can be used for limited historic-preservation projects are available to members who are public agencies or nonprofit organizations.The funds can't be used for construction and must be matched dollar-for-dollar.They can be used to find a preservation architect, a landscape architect or a real estate development consultant.You can apply for a grant if you review the application requirements.