FHA Title 1 Home Improvements Loans

Asked by Tryska, Atlanta, GA Wed Aug 25, 2010

Can they be used to build a garage that will *eventually* have an apartment above it? I see that it can be used to fund Construction of a non-residential out building.

I would like to build a garage, and include a workshop below, and storage space above, that will eventually be finished into an apartment (or more precisely flex space with a bathroom and a kitchenette). Since i would like it built to residential code but not for immediate occupancy, could I use an FHA Title 1 loan?

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, ,
Wed Aug 25, 2010
The Federal Housing Administration (FHA) makes it easier for consumers to obtain affordable home improvement loans by allowing loans up to $25,000 without any equity in the home. In otherwords, the loan can exceed the value of the home.

The Title I program insures loans to finance the light or moderate rehabilitation of properties, as well as the construction of nonresidential buildings on the property. This program may be used to insure such loans for up to 20 years on either single- or multifamily properties. The maximum loan amount is $25,000 for improving a single-family home or for improving or building a nonresidential structure.

For improving a multifamily structure, the maximum loan amount is $12,000 per family unit, not to exceed a total of $60,000 for the structure. These are fixed-rate loans.

Eligible borrowers include the owner of the property to be improved, the person leasing the property (provided that the lease will extend at least 6 months beyond the date when the loan must be repaid), or someone purchasing the property under a land installment contract.

Title I loans may be used to finance permanent property improvements that protect or improve the basic livability or utility of the property--including manufactured homes, single-family and multifamily homes, nonresidential structures, and the preservation of historic homes. The loans can also be used for fire safety equipment.
Web Reference:  http://www.kimdjones.com
1 vote
Tryska, Home Buyer, Atlanta, GA
Wed Aug 25, 2010
It wouldn't be to rent out. Not anytime in the near future anyways (by near future I mean 5 years or so). It would be an in-law suite. And the house is in East Point, according to the zoning regulations I read on their website a garage apartment is acceptable as long as it's within size and height requirements.

I read the information Kim posted off of the HUD site as well which is why I am asking the question - it's this part that is my sticking point:

"The maximum loan amount is $25,000 .....or for improving or building a nonresidential structure"

What defines non-residential structure?
0 votes
Wed Aug 25, 2010
As far as I remember these kinds of loans have to improve the livability of the property. I'm not sure a garage apartment to be rented out would be allowed.

Elena Ollick
Amerivest Realty
Faith Home Loans
skype: napleshomes
Get Pre-Approved: http://www.faithhomeloans.com/express.html
0 votes
, ,
Wed Aug 25, 2010
Thanks Mike!! I appreciate the compliment....
Web Reference:  http://www.kimdjones.com
0 votes
Cathy Muzzy, , 30305
Wed Aug 25, 2010
Be sure that your property is zoned for multi-family. If you are in a single family area in the city, garage apartments are considered multi-family.
0 votes
Michael Hamm…, Agent, Suwanee, GA
Wed Aug 25, 2010
Great info, Kim. Thumbs up!

Michael Hammond

0 votes
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