Federal Housing Administration

To make getting repairs easier, and to make completing these repairs affordable, the Federal Housing Administration (FHA) has developed a home improvement loan called a Title 1 loan. FHA home improvement loans are not granted or extended by the Federal Government but rather from lending agencies that meet standards set forth by the Housing Administration. The Federal Housing Administration insures the loan for the lending agency, meaning that if a borrower is default on a FHA home improvement loan, the FHA pays the remainder owed to the lending company. Then, the federal government will pursue the defaulter, or homeowner, for repayment of the amount owed. This federal backing enables lenders to offer much lower interest rates as compared to traditional home equity lending programs.