Remodeling your house is not as easy as rearranging your furniture. It takes more than just your time and money to get the best result. If you have a lot of equity in your home you could borrow against that.  If you do not, you will need to consider other alternatives.  The Federal Housing Administration (FHA) has a specialized loan that might help. The National Housing Act authorized a program on loan insurance under Title I. A FHA Title I loan entitles qualified lenders to make a loan, while covering them with insurance for any possible losses.

If you wish to make basic home improvements on your house this FHA-insured Title I loan may be the best thing that could ever happen to you. You can make use of this loan to take care of basic remodeling needs.  It will not, however, cover lavish remodeling plans.

This type of loan is an answer for home improvements to accommodate a disabled person. These improvements may include the addition of ramps inside and out. Or they could include customizing cabinets, doors, and other things.

Title I loan insurance program has various benefits for which you should consider. This kind of loan does not require you to be in a particular area in order to take advantage of the loan. You can be anywhere in the country. You may not need added security for loans that are under $7,500. It does not require you to submit a mountain of documents in order to apply for the loan. All you will need are documents to that prove that the property is yours or that you have a long-term lease on it, a filled-out loan application form showing your ability to pay back the loan by being a good risk, and a note that states your agreement to pay for the loan. If your house is still under a mortgage or housing loan, this may not be affected, as a Title I loan is a different kind of loan.

A Title I loan will pay the expenses necessary for your remodel, which may include the costs for an architect and an engineer, in addition to materials and labor. This loan could also cover the fees for the building permit, title examination, appraisals, and inspection. The process of applying for this loan is not as difficult as the other types of loans since only the lender has to approve for your loan. If approved, you will be asked to provide them a certificate of completion when the remodeling is done. The loan also has the advantage of  securing you from damages, as the lender is required to approve the dealer or contractor who will be doing the job for you.

The interest rate of the Title I remodeling loan is between the borrower and the lender. Housing and the Urban Development (HUD) or FHA do not get involved with this.

For a Single Family property whose remodeling requires alteration, repair or improvement, the maximum loan amount is $25,000, and the maximum term is 20 years.  The actual amount and term of the loan will depend on the ability of the borrower to pay. A Manufactured (Mobile) Home that may have the same remodeling needs has a lower maximum, $17,500 and a 15-year term, as long as it qualifies as a real property. Otherwise, if it simply qualifies as a Personal Property, there is a maximum of $7,500 and 12 years. A Multifamily Property Improvement loan could involve a larger amount of money. A remodel that converts a single family structure to one that will be occupied by two or more families, could qualify for a maximum of $60,000 and 20 years. However, the expenses for each private unit should not exceed $12,000.

The construction or improvement of a nonresidential building, may also qualify for a Title I loan. In this case, the maximum is $25,000, with a 20-year term.

Finding a good lender should not be stressful to you as you go through the long process of remodeling your home. Only deal with those that are legally approved by the FHA so as to protect yourself from any financial damages. For a list of lenders in your area, contact HUD’s Customer Service Center