No appraisal, no qualifying, do anything you want with the money.  That’s what the FHA Title I program offers homeowners, including landlords who own single family up to five-unit multifamily properties.

In an effort to improve the housing stock by financing “needed repairs” on property, FHA established this program.  You need not have perfect credit, you need not have any equity in the property and still the government will insure a loan for fix-up and remodeling.
 
  This program isn’t used much anymore, what with high limits on credit cards and low interest on home equity loans.  But investment property owners usually don’t care much how high the interest rate is if their bottom line is right.

Just about any remodeling project qualifies except luxuries such as swimming pools, hot tubs, tennis courts and moveable items such as refrigerators, satellite dishes, and window air conditioning units.  On the other hand, updating a kitchen or bathroom, adding a room, finishing a basement, painting the outside,  all those would be no problem.

The best part is that it’s quick and easy.  Peter Bell, executive director of the Title One Home Improvement Lenders Association says, “It’s the quickest check in town.  If you apply for a Title I loan on Monday, you can usually receive a check by Friday.”

Under the program if the lender determines you have the ability to repay, you can borrow up to $15,000, no matter how much you owe on the property.  And if the loan amount and the other underlying mortgage(s) doesn’t exceed the pre-improved value of the property, you can borrow up to $25,000.

Appraisal are needed only on loans over $15,000.  For loans less than $15,000, they’ll take your word for it.  Ballard says, “We don’t even look at the property unless someone wants to borrow more than $15,000.”

Unlike most other FHA programs, this one is available to non-owner occupants.  In fact, the same rules apply as for owner occupants.  The only difference is the maximum loan amount on multi-family properties is $60,000, or an average of $12,000 per unit, whichever is less.

Interest rates are all over the place, depending on the number and types of lenders who are active.  They vary from 9% to 9.5% in the East to nearly 14% in California.  But finding a lender can be a trick.  You may have to call around.  The majority of the lenders are credit unions, so if you are a member, yours might be the place to start.

If all else fails, call the HUD Title I office in Washington, DC at 202-755-7400.  They can give you a list of the lenders in your area.