This type of FHA insured loan may be used when repairs needed include structural alterations, modernization, roofing, disability access, installation of a well, or installation of a septic system.
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Using your home to secure one of the above loans, enables you to finance home improvement with a low interest rates. These options also represent a variety of ways to disperse and repay the loan. If you are buying a home that needs $5000 of work, there are several different avenues to try.
The Department of Housing and Urban Development through the Federal Housing Administrations Section 203(k) program insures loans geared towards the rehabilitation of property, hoping to revitalize aging neighborhoods. A FHA insured home improvement loan is key because generally lenders will not provide a loan against a home that does not meet certain standards as far as value and condition. This means that a borrower would have to make the repairs before he or she was able to get the loan. However, if the loan is FHA insured, it will be released in order to have the repairs made whether the worth of the home is adequate or not. Also, the FHA insured loan amount would be the same as it would if the repairs were already in place.
For homeowners looking for a way to fund repairs and modifications, there is
a large array of loans to choose from.
- Second mortgages or home equity loans
- Home equity lines of credit
- Home Equity Conversion or Reverse mortgages