Home Loan Resources

What Is An FHA Home Improvement Loan?

An FHA Home Improvement Loan might help you build your dream residence. These specialized loans cover a number of improvements that drastically increase the quality of a home. While there are some exceptions to the types of remodels eligible for an FHA Home Improvement Loan, these are few. So if you're thinking about improving, this loan is most likely for you. Here are the basics you should understand.

Historical Background

Founded as a result of 1934's National Housing Act, the Federal Housing Administration helps insure loans for home building and buying. As this government agency focuses on improving housing conditions and standards of living, it helps many prospective buyers become home owners. Consumers who have already purchased homes also stand to benefit from the rules and tenets the FHA has established; the FHA loan program was specifically designed to help such individuals.

How Will My FHA Home Improvement Loan Work?

An FHA Home Improvement Loan is actually an insured type of federal assistance. As such, the FHA Home Improvement Loan program lets homeowners borrow money at better rates and terms that they usually couldn't afford without help. By maintaining fixed rates over a 20 year period, these loans substantially reduce consumer burden.

Every FHA Home Improvement Loan application is based on your credit score. Naturally, higher scores help speed FHA Home Improvement Loan processing along, but because these loans are made to help lower income consumers, restrictions are generally less stringent than those for generic loans. Other factors that help lenders determine eligibility include typical assessments like debt-to-income ratio and other credit report statistics.

What Kinds of Work Can My FHA Home Improvement Loan Pay For?

The FHA Home Improvement Loan program permits single family structural improvement loans up to $25,000 and multifamily loans up to $60,000 or $12,000 per family unit. This means that your loan can actually surpass the total value of your home, which is great for struggling families who need to make major changes.

An FHA Home Improvement Loan is valid for everything under the sun, from basic fixture improvements like plumbing upgrades and rewiring to extensive, expense-saving jobs such as energy efficiency improvements and roof replacements. Many homeowners even use their FHA Home Improvement Loan to fix nonresidential structures. As long as you own, are about to purchase or are leasing the property for a period that exceeds the repayment date by six months, you are eligible for an FHA Home Improvement Loan.

How Do I Get My FHA Home Improvement Loan Started?

The best way to apply for your FHA Home Improvement Loan is to shop around for lenders. The FHA doesn't make loans itself, it only insures them, and you must find lenders who originate eligible ones. There are hundreds of online lenders who can offer favorable terms and finding an FHA Home Improvement Loan that will provide you with money to make the renovations you need is just a matter of filling out an application.

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