I apologize for the very generic thread title, is a lot more complicated than that. My mother-in-law is facing a balloon payment soon in the next two years on the dilapidated 1 bedroom house my wife and her grew up in as a single-mother household. Her mother still resides there, and we've been attempting to figure out the best course of action to get her out, sell the house, and pay off the debt left on the house.
Their current course of action is restoring the house to a state which it can be sold with no issues, and hope the sale amount significantly reduces the remaining balloon loan payment. This is difficult, given MIW more or less couldn't afford to maintain the house over the decades and it fell into disrepair. They're close to paying off a small loan that updated all of the plumbing, but still would have to shell out for roof repairs, structural floor repair, electrical update, and a portion of the house that is very likely plagued with black mold. The plumbing more or less was needed so she could continue living there.
MIW heard about those federal "grants" for revitalizing run down houses in rural farming communities, and seems convinced it would be a better solution in terms of interest than throwing down more loan money at another bank. Of course from my perspective you're simply adding another loan (which really is what the "grant" is in the end) on top of the current balloon loan you can't pay off, just to pay off the balloon. To her credit however, I read that condemned properties sell for less than the land it sits on if the house wasn't there to begin with. This makes repairing the house seem like a no-brainer but I'm not entirely convinced. This is a small house in a small town with a declining population and underwhelming housing market. I would guess that the expensive repairs would eventually total what the original loan was, but a price that high couldn't be justified years later on the market in this dying town, even if it was functional and clean.
Obviously researching what similar dilapidated houses are going for in the area would help. I also forgot that the WeBuyUglyHouses type companies exist, but only consider that as a possible last resort. Looking for other avenues, routes of advice that I'm ignorant about or haven't considered if any. I know this is a pretty specific detail oriented question, but any suggestions or discussion is appreciated. Thanks!