October 11, 2012
A reader asks, “I am interested in borrowing a small amt. of money for remodeling my home. Is there any way I can qualify for an FHA loan for this purpose? I have never had bankruptcy, never missed a payment, never defaulted on any loan…”
Something called a Title I Home Improvement loans are described on HUD.gov as a way to do just what this reader question describes. According to the official site on the page titled “About Title I Home Improvement Loans” you’ll find the following description:
“HUD insures private lenders against loss on property improvement loans they make. The applicant must have a good credit history and the ability to repay the loan in regular monthly payments. Both large and small improvements can be financed. Search HUD’s list to find an approved Title I lender in your state. HUD does not lend money for property improvements.”
What can Title I loans be used for? “Loans on single family homes may be used for alterations, repairs and for site improvements. Loans on multifamily structures may be used only for building alteration and repairs.” FHA borrowers should take note, as this type of HUD loan “can be used in connection with a 203k Rehabilitation Mortgage. For additional information on that program, call (800) 767-7468 and request item number 2571.”
Who is eligible to apply for these loans? According to the official site, property owners can apply with any participating financial institution authorized to make Title I loans. Since these mortgages are intended for home improvements, the amounts of the loans are naturally lower than for the purchase of a single family residence. According to the official site, here are some additional details on Title I loan amounts and terms:
Maximum Loan Amount:
Single family house – $25,000.
Manufactured house on permanent foundation – $25,090. (classified and taxed as real estate)
Manufactured house (classified as personal property) – $7,500.
Multifamily structure – an average of $12,000 per living unit, up to a total of $60,000.
Maximum Loan Term:
Single family house – 20 years.
Manufactured house on permanent foundation – 15 years.
Manufactured house (classified as personal property) – 12 years.
Multifamily structure – 20 years.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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