HUD insures private lenders against loss on property improvement loans they make. The applicant must have the ability to repay the loan in regular monthly payments. Both large and small improvements can be financed. HUD does not lend money for property improvements.
Property Improvement loans may be used to finance alterations, repairs and improvements for
- a home, including a manufactured home, which has been occupied at least 90 days
- a nonresidential structure that is functional and was completed prior to loan application
- or to finance the construction of a new exclusively nonresidential, and structure.
Improvements must substantially protect or improve the basic livability or utility of the property. These loans may be used in conjunction with a 203(k) Rehabilitation Mortgage. For additional information on that program, call (800) 767-7468 and request item number 2571.
A property owner may apply at any lender (bank, mortgage company, savings and loan association, credit union) that is approved to make Title I loans. Beware of deceptive home improvement contractors.
Who To Contact: HUD's Homeownership Centers do not process Title I loans. For more information, please call (800) 767-7468 and request item number 2651, "Fixing Up your Home and How to Finance It."
The Loan Amounts and Term Limits can be viewed at:
https://www.hud.gov/program_offices/housing/sfh/title
Interest Rate: The interest rate is a fixed rate that is generally based on the most common market rate in the area. It is negotiable between the lender and the borrower, and may vary between lenders.
Loan Security: Any loan over $7,500 must be secured by a mortgage or deed of trust on the property.
Loan Prepayment: There is no prepayment penalty.
Minimum Age of New Residential Structures: Structure must have been completed and occupied for 90 days.