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b. Allowable Loan Parameters (05/09/2022)
i. Maximum Loan Amounts
The principal amount for a Property Improvement Loan must not exceed the actual cost of the Eligible Improvements in the project plus Financeable Fees and Charges, up to the Title I Property Improvement Nationwide Loan Limits.
The Nationwide Loan Limits are based on the property type and loan purpose.
(A) Title I Property Improvement Nationwide Loan Limits
A Title I Property Improvement Loan must not exceed the Nationwide Loan Limits published by HUD, including any Financeable Fees and Charges.
The Title I Property Improvement Nationwide Loan Limits for the Property Improvement program are statutorily mandated.
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II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs
2. Property Improvement Loan Program
For Title I Property Improvement Loans, the loan amount is limited to the lesser of the cost of eligible improvements, plus any financeable fees, or the amount shown in the charts below for the property type or loan purpose.
Single Family and Multifamily Residential Property Types
Number of Units Secured Maximum Loan
Unsecured Maximum Loan
Amount One $25,000 $7,500 Two $24,000 Three $36,000 Four $48,000 Five or more units $60,000 Manufactured Home classified as Real Property
Amount
$25,090
Manufactured Home classified as Chattel or Personal Property
$7,500
Lien is optional
Other Property Types and Loan Purposes
Type or Purpose Secured Maximum Loan
Unsecured Maximum Loan
Amount Nonresidential Property $25,000 $7,500 Historic preservation for residential dwelling(s)
Amount
Lesser of: $15,000 per Dwelling Unit; or $45,000. Fire Safety Equipment Loans $50,000
If the Borrower has more than one Loan, the combination of the outstanding balances on a particular Property must not exceed the largest of the maximum loan amount limits prescribed for the property type or loan purpose.
(B) Required Investment
The Borrower is not required to contribute funds to the property improvement project. All money to fund the eligible improvements and allowable fees may be derived from the proceeds of the Title I insured Loan, and other sources, as applicable.
(C) Minimum Equity
The Borrower is not required to have equity in the Property.
ii. Loan Term
(A) Minimum Loan Term
The minimum loan term for all property types and purposes is six months.
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II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs
2. Property Improvement Loan Program
(B) Maximum Loan Term
(1) New Property Improvement Loan
The maximum loan term for a new Title I Property Improvement Loan is based on property type and purpose.
Single Family and Multifamily Property Types
Number of Units Loan Term Maximum Minimum One 20 years and 32 Days
Two Three Four Five or more units Manufactured Home classified as Real Property
6 months
15 years and 32 Days Manufactured Home classified as Chattel or Personal Property
12 years and 32 Days
Other Property Types and Loan Purposes
Type or Purpose Maximum Loan Term
Minimum Loan
Term Nonresidential Property 20 years and 32 Days
Historic Preservation for Residential Dwelling(s)
15 years and 32 Days 6 Months
Fire Safety Equipment Loans for Health Care Facility
20 years and 32 Days
(2) Refinance of an Existing Title I Property Improvement Loan
A Property Improvement Loan may be refinanced for an extended period, in accordance with the following rules:
• the maximum term permitted for a Loan that refinances a Borrower’s existing insured Property Improvement Loan must not exceed the maximum term permitted for its property type or loan purpose; and
• the total time period from the date of the original Loan to the final maturity of the refinanced Loan must not exceed the maximum term permitted for a new Loan plus 9 years and 11 months. This particular limitation applies to all property types and loan purposes.
iii. Loan Insurance Premium
FHA collects an annual insurance premium charge for eligible Loans originated under the FHA Title I Property Improvement Loan program.
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II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT E. Title I Insured Programs
2. Property Improvement Loan Program
The Title I Property Improvement Loan program does not require the payment of an Upfront Insurance Premium (UFIP).
(A) Annual Loan Insurance Premium
The annual loan insurance premium is an obligation of the Lender. The Lender may pass the premium charge on to the Borrower, provided that such charges are fully disclosed.
HUD collects the insurance premium in annual installments of 1 percent of the original loan amount.
The loan insurance premium must be paid for the full term of the Loan unless the Loan is prepaid in full or the Lender files a claim with FHA.
(B) Passing Loan Insurance Premium to Borrower
Lenders must disclose the loan insurance charges to be paid by the Borrower according to required laws, and RESPA and TILA as applicable. Additional or separate disclosure agreements for the fee is not required to be in the file.