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FHA Title I Property Improvement Loan Program

by Adrian
(Portland, OR)

Why am I having a hard time finding a lender for the Title I loan program. I have called several lenders on the approved list from HUD's website and most are not aware of the program and others pushed me onto the 203 program.

=====ANSWER=====

Hello Adrian,

I really commend you for doing your homework, reviewing my website, and asking such a good question. As far as the HUD lenders you have called not being aware of a Title I Home Improvement Loan, I cannot answer that.

However, I would like to make sure that you understand what the Title I Home Improvement Loan Program is.

FHA's goal is to make it easier for you to get an inexpensive home improvement loan. They do this by insuring the loan.

So the key is to find a lender who works with this Title I Program. Since this loan program has a maximum of $25,000, that may be why most lenders are saying they have never heard of it. There is a lot of paperwork for a very small loan.

I would suggest you contact the HUD Housing Authority in your area. I found one in your city that specializes in home improvement counseling, Acorn Housing. Their number is 503-788-9989. Keep in mind they are a counseling agency and not a lender, but they may be able to point you to a lender who can do that type of loan.

Now the 203(k) Program is specially designed for you to purchase a home and improve it all under the same loan product.

This program may also work for you and that may be why those lenders are pointing you to it. The difference between the 203(k) and the Title I is the 203(k) can be used for an acquisition and home improvements or home improvements by themselves. Whereas the Title I is for home improvements only.

Remember all loan officers think of their pay checks first, so they may try to persuade you to refinance the entire house and the home improvements thus earning them a larger commission. My advice is to be persistent while looking for a lender who can work with you.

Now if you are about the purchase a house and make improvements, then the 203(k) would be the only program that will do this.

Hope you found this helpful and please pay it forward by sharing this website with others.

Kind Regards,
Jeff

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Finding FHA Title 1 Loan

by Amanda K.
(St. Louis, Mo. USA)

I am having trouble getting in touch with a lender for the FHA Title 1 Home Improvement Loan. Everyone tells me they don't do that. Please help. I think this is my only option.

Sincerely,
Amanda

======ANSWER======

Hello Amanda,

I really appreciate you coming by my website and asking me this question.

The Title 1 loan is indeed a hard one to find. The lender has to be approved by HUD in order to do this kind of loan.

I assume you are already living in a home and need to do improvements. That is how this loan product works.

Now with that said, in most cases this is a small loan and for most loan officers they just don't want to mess with it. It requires a great deal of paperwork for a small commission.

But you are the customer and you have right to this loan product. It just may take some serious persistence to find one.

I did a little searching for you at the HUD website to try and help you out. Keep in mind these lenders have to be approved by HUD to do Title 1 loans in your area of St Louis MO. Follow this link for Title 1 lenders in St Louis Mo.

I hope you find what you are looking for. I know the results show they are Title 2 lenders, however the search at HUD's website serve these lenders up as Title 1 lenders also. Do not let the fact they are from different states affect you. They are the approved Title 1 lenders for your area.

If you like what you see here at my website, please help spread the word about me to others you may know who need the same kind of help you do. This site is for that very reason and by people visiting my sponsors I earn my living.

You can pay it forward by sharing this information with people you may know using the link at the bottom of this page.

Kind Regards,

Jeffrey Ragan



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FHA Title 1
by: tim

I have found multiple lenders who have the title 1 loan option but they require a near perfect credit score and I thought the title one loan was a score ranging from 500 and up. I see it is up to the lender and that is why I am having a tough time.

FHA Title 1 Loan
by: Jeffrey

Hello Tim,

You're correct. Lenders can decide what credit requirements they want to see for any loans.

What's strange is the credit requirements for the actual purchase of the home are lower than the FHA Title 1 loan.

Keep in mind, the FHA Title 1 loan is for those folks that already live in the house and want to make improvements.

Title I loans feature terms up to 20 years on either single- or multifamily properties. The maximum loan amount is "$25,000 for improving a single-family home or for improving or building a nonresidential structure" according to the FHA official site.

My thoughts are, since this is a very low loan amount, lenders tend to be picky. The paperwork is pretty much the same for a FHA Title 1 loan as it is for an FHA 203(b).

So yes, this may be a very hard loan to obtain. HUD may have set guidelines for this loan to be given, but lenders have always seemed reluctant to do them.

FHA Title 1 Loan
by: Mike Edison

Helpful post for us, the work you provided here is awesome.


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Where can I find a lender who does FHA title 1 loans?

by Ellen C
(Chester Springs, PA)

Where can I find a lender who does FHA title 1 loans in PA?

Hello Ellen,

Your question is a good one and I must say, finding lenders that will do a
FHA property improvement loan is like trying to find a needle in a haystack.

First of all you need to be sure that the Title One loan is what you need. So please read over the page referred to on the link above.

Also, you may want to talk with your local banks about this subject. The FHA Title One loan is really an insurance policy to the lender so they can lower their risk in case of a default.

I did a little research for you at the HUD.Gov website and came up with a list of 52 lenders. I do not know if they are in your area or not, but they are in PA.

Here's what I found FHA Title One Lenders in Your Area.

I hope this helps. Please be sure and help me build my web presence by paying it forward and tell others about my site and the valuable information found here.

My goal is to help people find good reliable and non-biased information.

Kind Regards,

Jeff Ragan

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FHA Title 1 Lenders
by: Sally

What a great question!!! I was wondering where to look for these lenders and now have a resource to find them. Thanks so much for this great question and answer!

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