FHA Home Improvement Loans

Under Title, I the Department of Urban and Housing Development (HUD) insures lenders against most losses on home improvement loans. Note: FHA is under the HUD.

This means that consumers can apply for these loans. Because the loans are  government insured, they may be easier to obtain.

Home Improvement Loan Criteria

Following are the criteria for consumers to obtain these loans from their HUD approved lender:

• Finances light or moderate improvements as well as construction of non-residential buildings on the property
• Insured up to 20 years
• Can be used for  single or multifamily structures
• Maximum loan amount for a single family structure is $25,000
• Maximum loan amount for multifamily structure is $12,000 per unit up to a $60,000 limit
• The borrower has to be the property owner, or a leaseholder (providing that the lease extends at least six months after the loan repayment date)
• The applicant is purchasing the property under a land installment contract

These loans are to be used to finance permanent home or property improvements that enhance or make more secure the basic livability of the property.

This includes manufactured homes, single-family homes, multi-family homes and non-residential structures. The funds can also be used for the preservation of historic homes.

Improvements could be but are not limited to:

• Constructing a garage
• Remodeling a kitchen
• Building an addition to the home
• Putting in a second bathroom
• Finishing a basement

For more information, check the HUD website (www.hud.gov) or your lender.

Steve Wyrostek -HomeLoans.org Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.