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This may not be the answer for everybody (check out your options at the end of this article), but if it is, you’re in luck.
If you were to go to the bank, or another conventional lender, and you don’t have much equity in your home, it might be difficult to get the financing needed to make those improvements. But if you qualify, a Title I
American home loan could be your answer.
Title I is the oldest housing insurance program of the Federal government. It was first authorized by Title I of the National Housing Act in 1934 – over 65 years ago. It is available through the FHA division of HUD.
As with other FHA programs, the administration doesn’t actually lend the funds, but it insures the loan. The loans are actually made by FHA approved lenders.
To qualify for a Title I loan, you must have at least a one-half owner interest in the property or have a long-term lease and be an acceptable credit risk. A borrower’s total fixed expenses cannot exceed 45 percent of gross income. This includes debt for such items as cars, houses, credit cards, and various types of other loans. It does not include such items as food and utilities.
Quite often, qualifying for a loan can be difficult, but with a Title I loan, even folks with low to middle income can qualify. In fact, a recent study by HUD indicated that 35 percent of the borrowers were low income and 25 percent were moderate income.
For more information, call 1-800-733-HOME (1-800-733-4663) to find a local FHA-approved Title I lender from the FHA’s consumer assistance line.
