Home Improvement Loan (Title I)
A Title I home improvement loan may also be used in connection
with a 203k
Rehab Mortgage.
Title I Loan Description
A Title I home improvement loan (also called
a Title I property improvement loan) is a loan made by private
lenders that is insured by the Federal Housing Administration (FHA),
part of the U.S. Department of Housing and Urban Development (HUD).
Title I loans may be used to finance permanent
home improvements, rehabilitation, building alterations or repairs
that protect or improve the basic livability or utility of the
property -- including single-family and multifamily homes, manufactured
(mobile) homes, nonresidential structures, and the preservation
of historic homes.
These home improvement loans may be used for any property improvements,
large or small, that will make your home more livable and useful.
You can even use them for dishwashers, refrigerators, freezers,
and ovens that are built into the house and not free-standing.
The loans can be used for fire safety equipment, energy conserving
improvements, or solar energy systems. Borrowers may also
use the loans to make improvements for accessibility to a disabled
person such as remodeling kitchens and baths for wheelchair access,
lowering kitchen cabinets, installing wider doors and exterior
ramps, etc.
In addition, loans on single family homes may be
used for site improvements, as well as the construction of nonresidential
buildings on the property. However, you cannot use these loans
for certain luxury-type items such as swimming pools or outdoor
fireplaces, or to pay for work already done.
Improvements can be handled on a do-it-yourself basis
or through a contractor or dealer. Your loan can be used to pay
for the contractor's materials and labor. If you do the work yourself,
only the cost of materials may be financed.
Some of the advantages of the Title I home improvement loan
are:
- You do not have to live in any particular area to get one of
these loans.
- You seldom need any security for loans under $7,500 other than
your signature on the note, and you need no cosigner.
- You do not have to disturb any mortgage or deed of trust you
may have on your home.
- To obtain a loan, you only need to own the property or have
a long-term lease on it; fill out a loan application that shows
you are a good credit risk; and execute a note agreeing to repay
the loan.
- Your loan can cover architectural and engineering costs, building
permit fees, title examination costs, appraisal fees, and inspection
fees.
- You are not hampered by a lot of red tape. Usually only the
lender has to approve your loan, and can give you an answer in
a few days. When the work is finished, you will need to furnish
the lender with a completion certificate.
- You receive some protection from unscrupulous dealers, because
FHA requires that any dealer who arranges a loan for you must
first be approved by the lender.
Borrower Eligibility
Eligible borrowers include the owner of the property to be improved,
the person leasing the property (provided that the lease will
extend at least 6 months beyond the date when the loan must be
repaid), or someone purchasing the property under a land installment
contract.
The applicant must have a good credit history and
the ability to repay the loan in regular monthly payments.
The information provided in this website is
not legal advice and should not be interpreted as legal advice.
This website is intended to provide a basic understanding of this
information in summary form. This information may not be comprehensive,
is subject to change, and may not apply to all individual circumstances.
Any information received here should be confirmed with the appropriate
government agencies or with an attorney, particularly as it relates
to your individual circumstances. Your use of this website indicates
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