This article covers the various programs offered by the U.S. federal government that can help low income homeowners pay for new flooring or other home improvement projects.
As originally seen on Realtor.com: Owning a home is part of the American dream. The United States Department of Housing and Urban Development (HUD) is a division of the government started in 1965 and set up to help families and citizens preserve their homes and neighborhoods. HUD has many missions in assisting American citizens-- helping individuals purchase and maintain a home, assistance during periods of economic difficulty and affordable loan opportunities. HUD's primary function is the facilitating of affordable loans to homebuyers. HUD has many other missions in ensuring equal opportunity safe housing for all citizens regardless of race or religion. HUD has a unique program of counseling and advising homebuyers. This program is invaluable in teaching homeowners how to handle the finances of owning a home and retaining the home through budget advice. Here is an overview of some HUD programs.
HUD's Title I program
HUD insures loans for bank and private lenders. The Title I program is geared to improving homes and neighborhoods. HUD offers loans for various home improvements such as a new oven, dishwasher, heater, sidewalk repair or home refinancing. The applicant must have a good credit history and the ability to repay the loan. The Title I program is not a grant. It is a loan that must be repaid. The Title I home improvement loan program is available for small and large improvements. Loans under $7,500 do not require a cosigner and loans are available for up to $25,000.
203(K) Home Improvement Loan
The 203(K) Rehabilitation Program is another type of home improvement loan available via HUD. Lenders must be approved by HUD to be an authorized lender and representative of the 203(K) program. 203(K) program funds can be used to purchase, renovate or repair a home. The program enables house rehabilitation which leads to a better quality of life and the financial improvement in the value of the home as a result of the repairs.
The 203 (K) Home Improvement loan allows the applicant to improve: Structural needs, health and safety issues and roofing and termite damage. Single homes and multi-dwelling homes are both eligible for the 203(K) home improvement HUD insured loan. The 203(K) Home Improvement Loan was designed to focus on the updating and repairing of single family homes. Community leaders and organizations have utilized the 203(K) home improvement loan to revitalize neighborhoods. The 203(K) loan has given many citizens the opportunity to become homeowners. Loan amounts are based on the home's improved value. The mortgage amount cannot be more than 100 percent of the "after" improved value. Most real estate agents are trained in HUD programs and can advise if you qualify for a HUD loan and approximately how much of a loan can be attained for a particular home.
Documents included
Documents for a Title I and 203(K) HUD home improvement loan include: two years of continuous income, credit reports that have no more than two thirty-day late reportings within the prior two years. If there was a bankruptcy, it must be two years old and you must have a perfect credit score. If there was a foreclosure, it must be three years old and you must have a perfect credit score. HUD loans make it possible for applicants working hard to keep their credit report timely and clean to receive a home improvement loan via the Title I and 203(K) program.
Home improvement
HUD programs were designed to meet the needs of Americans striving for home ownership. A home is expensive; repairs, capital improvements and fixing of safety issues can also be very expensive and may be needed to build or maintain the value of the home. A home on which critical maintenance is not performed can ruin or devalue it. HUD recognizes the difficulty in raising needed money to fund basic repairs to a home. The program rewards citizens who are diligent in their credit score but do not have an abundance of cash flow. HUD has many programs and details to assist homeowners in finding a HUD home improvement loan.