The Department of Housing and Urban Development offers Title I Loans, which can help you finance a home renovation project at little or no expense to you. And with a government-backed home loan, you will be eligible for a lower interest rate than your private lender will offer.
Getting a HUD Title I loan allows you to finance a house renovation with the minimum amount of money necessary to complete the project and to get it approved. The process for obtaining a mortgage is less complicated than obtaining a private mortgage. The costs of this loan are usually far less.
Your federal HUD loan, Title I Home Equity Loan, can help you get an initial interest rate on a renovation of between 3% and 6%, depending on the project. And the maximum amount you can borrow can be up to $375,000, which is the limit for a mortgage in the United States.
HUD Title I Loans are available to the general public. If you have a relative or friend who is a tenant in a home, you can ask them to act as a guarantor and have them provide a cash security deposit. The minimum guaranty amounts are usually $2,500. However, if you are taking out a title loan for a rehabilitation project, you may want to consider a guaranty option.
In addition to mortgages, you may also be able to obtain a government-backed business loan. For example, you might be able to borrow up to $15,000 for renovations to convert a vacant warehouse into a small manufacturing business space. If the building owner declines your offer for a business loan, you may still be able to receive a HUD loan to make the renovation loan. You can visit websites like SoFi to get further details.
Some of the key benefits of using a government loan are reduced interest rates, a special low-risk rating, and preferential terms.
When it comes to obtaining a government loan, you may need to bring a completed project to the county building and zoning office in order to qualify. If you are purchasing a house for investment, you can get a low-interest loan, however, your property may have to go through an appraisal before you are approved.