FHA Title 1 Loan

[BSBRose21]

Hi! Has anyone used the Title 1 Home Improvement Loan option through FHA? It sounds like a good program but I haven't found lenders that use it.

[Anonymous]

I was curious about it as well as my home seemed like a perfect match. Built in 1992 but needed updates to windows and mostly cosmetic like flooring, outdated kitchen and fixtures. 

The lenders I asked seemed hesitant. One told me it can be a 6 month closing process as you have to use FHA approved contractors, etc and they are not available in all locations. The other told me it's really not meant to be used unless you feel the house needs work that would not get it past inspection during a regular FHA loan. They told me for my specific circumstance to be in the home 1 year and then get a home equity loan. 

[Anonymous]

I am going through one right now through Admirals Bank. I applied at about noon and they called me about 4 to tell me I was approved. Closing documents were sent 2 days later. We were approved for 25k at 8% for 20 years. Closing costs are deducted, so the total ended up being around 23k. They told us we could use it for anything. We are having a garage, fence and new shower put in. Just waiting on final contractor estimates (they are slow). The money will be wired to us same day that we get our estimate.

[Anonymous]

I did one 2 years ago with admirals bank. Only lender I could find with the program.

It was pretty fast and easy to apply, close and have the funds. They sent someone out to my house with all the documents to sign. Good lender and good program.

[VALoanMaster]

Just an FYI for anyone thinking about taking out an FHA title 1 loan.

If you default on this loan or go through foreclosure, FHA will put you in CAIVRS until the loss is paid off.

This is completely different than a regular FHA loan where the CAIVRS hit only lasts for 3 years from the date the claim is paid.

I helped a client get into a VA mortgage last year & she was in the CAIVRS system for an old FHA Title 1 loan on a home that was lost to foreclosure 20 years ago! She would not have been able to get an FHA loan until that loan was paid back.

Borrow wisely.

[Anonymous]

Im interested in this loan. If you dont use a contractor and do the work yourself how do they verfy where the money is spent?

[dragontears]

Most rehab type loans require the use of a licensed contractor and you can't just do the work yourself

[Anonymous]

I was asking because Admiral Bank states you can:
Admirals Bank is the largest national FHA approved Title I Home Improvement Lender. Whether you're hiring a contractor or doing the work yourself, this program gives you an opportunity to affordably finance home improvements.

[ShanetheMortgageMan]

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@Anonymous wrote:
Im interested in this loan. If you dont use a contractor and do the work yourself how do they verfy where the money is spent?

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Invoices, cancelled checks & inspections.

[Anonymous]

I also looked into it with Admirals Bank, and fyi, although the FHA has no minimum credit score requirements that bank’s program does require at least a 620 credit score.