 TITLE: How Do I Qualify for an FHA Home Improvement Loan? CONTENT: How Do FHA Title 1 Home Improvement Loans Work?\n-----------------------------------------------\nA traditional FHA loan is a government-backed mortgage that makes it possible to buy a home with a down payment as low as 3.5%. But what if you already own a home and need to make important updates that are beyond your budget?\nYou could apply for an FHA Title 1 Home Improvement Loan, which helps homeowners pay for certain types of work on a property. These loans are backed by the federal government (specifically the Federal Housing Administration), but homeowners apply for and obtain them from approved lenders, such as banks or credit unions. Since the loan is insured by the government, there's less risk for the lender, so they can be more lenient with borrowing criteria.\nThe loans are usually secured by your property, but if you borrow less than $7,500, you can obtain an unsecured loan. For single-family homes, homeowners can borrow up to $25,000 for a term of up to 20 years. For a manufactured home on a permanent foundation, the limit is $25,090; if the manufactured home is not on a permanent foundation, the max is $7,500. You don't need equity in your home to apply.\nThese loans can't be used for luxury items like pools or outdoor fireplaces, however, so they're less flexible than some financing options. The improvements must \"substantially protect or improve the basic livability or utility of the property,\" according to HUD. Eligible improvements include built-in appliances such as dishwashers, refrigerators or ovens; improvements that add accessibility for a disabled person; or energy-conserving and solar power improvements. You typically must show the lender the proposal or contract detailing the work to be done.\nFHA Home Improvement Loans don't cover the purchase of a home, but only updates to a property you already own. They're different from FHA 203(k) loans, which allow you to borrow money to both buy and renovate a home in a single loan. However, you can use an FHA Title 1 Home Improvement Loan concurrently with another type of mortgage to buy and renovate at the same time. While you can typically only have one FHA loan out at a time, there's no limit to how many times you can utilize FHA loans in your lifetime. END