One very practical way of financing your home improvement plans is by applying for Federal Home Improvement Loan program, also known as Title I Loan program. Title I loans or federal home improvement loan program are ensured by the government and can be used to upgrade the standard of your living. You may use the loan money to update the plumbing or electrical work and for other renovations. Title I loans or federal home improvement loan programs are applicable for single family and multi-family homes. You may even use the loan money to construct a non-residential building like a garage. It is very important to know that the Federal Home Improvement Loan Program could be used only if there is a need of a home improvement or any other renovations. If you wish to repair your pool or want to add a luxury then you may be denied the Title I loans. Other than that, the Title I loans are applicable if an accessibility has to made for an elderly or a disabled person in the house. However there are many other home improvement financing options available.
What is Federal Home Improvement Loan Program and Eligibility Criteria
The federal home improvement loan program or Title I loans are exactly the same as any other loans that you can apply for. The only difference is that the Federal Home Improvement Loans are guaranteed by the government. You can apply for this kind of a loan from any private lender. After the review of your credit standing (which should be good of course) and checking whether you have a stable income to repay the loan or not, the lender takes the final decision. You have to be the owner of the property in order to qualify for Federal Home Improvement Loan Program or Title I loans. However, if you are leasing the property, it is possible that you may qualify for the loan but there are some conditions you would have to meet in order to do so. It is very important in case you are applying fot home improvement loans for a leased property that the lease ends after at least 6 months past the date the loan will be paid off completely.
Where to Apply?
If you are planning to apply for Federal Home Improvement Loan program then you should contact any Title I loan lender. You can contact HUD (Homes & Communities US Dept of Housing) office for further information regarding the approved Title I lenders in your area and then apply with them for the loans.
Limitations
There are certain limitations to the Federal Home Improvement Loan program according to the type of a property you are applying the loan for. The criterion according to HUD’s website is mentioned as under:
Maximum Loan Amount:
- Single family house - $25,000.
- Manufactured house on permanent foundation - $17,500. (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 - 15 years.
The interest rates are not fixed and you can negotiate it with the lender. It is very important that the house you are applying the Title I loan or federal home improvement loan program for is occupied by you for at least 90 days. |
