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How to Get an HUD/FHA Property Improvement Loan

What it is

An HUD/FHA property improvement loan enables borrowers to obtain affordable home improvement loans by insuring loans made by private lenders to improve properties that meet certain requirements through the United States Department of Housing and Urban Development and the Federal Housing Administration, or FHA. Approved lenders make loans from their own funds to eligible borrowers to finance property improvements. The FHA insures the lender against the loss if the borrower defaults. Credit is granted based upon the applicant's credit history and ability to repay the loan in regular monthly installments.

The program insures loans to finance the light or moderate rehabilitation of properties, as well as the construction of nonresidential buildings on the property. The program is used to insure loans for up to 20 years on either single family or multifamily properties. The maximum loan amount is for $25,000 for a single family home or nonresidential property. For improving a multifamily structure, the maximum amount is $112,000 per family unit to a maximum of $60,000. The interest rates vary according to market trends.

Who it's for

Housing costs are always rising and not everybody can afford to make necessary property improvements. The HUD and FHA property improvement loan provides people who may not be able to afford renovations a second chance. Eligible borrowers include the owner of the property, the person leasing the property providing that the lease will extend at least six months beyond the date when the loan must be repaid, or someone purchasing the property under a land installment contract.

What you need to do to apply

In order to obtain a property improvement loan, a borrower must contact several lenders or mortgage brokers and determine which ones originate FHA loans. Each lender sets its own rates and terms.

Apply for an HUD/FHA Property Improvement Loan

Apply online for any type of housing loan at LoanWeb:

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