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Many people are aware of such groups as the Federal Housing Administration (FHA) and the Veterans Affairs (VA). Each of these agencies provides a wide range of programs and services to millions of people. They can be involved in disaster relief and medicine, but one area where both are very well-known is in the funding of housing and home improvement. Additionally both groups are excellent sources for government home improvement loans.
While not everyone qualifies for a VA home improvement loan (which demands a history of military service) almost any homeowner can access assistance through the FHA home improvement loan program.
How do the programs work? Both programs use private lending sources such as banks and mortgage companies to issue the loans, but they insure any loans made. This means that if a borrower is unable to repay the government home improvement loan to the lender, the VA or FHA steps in and pays the total amount due.
What are the terms? The government home improvement loans are much easier to get than a traditional loan because of the government insurance. This means that someone with poor or bad credit is just as likely to get a loan as someone with good credit. In either situation the funds can be used to make a wide range of upgrades, improvements or repairs.
The VA loans have no limit to the amount available and can be up to ninety percent of the equity available in the home. The repayment period is capped however, and the borrower on these government home improvement loans has fifteen years to repay what they have borrowed. Generally the VA loans have fixed interest rates around five percent and ask for few additional fees or closing costs.
The FHA loans are only slightly different and offer a total amount capped at twenty-five thousand dollars per single family home, with different amounts available to those in multifamily homes. The borrower does not need any equity in the home itself, and may even be able to borrow more than their home is currently worth. The repayment period is twenty years at what is considered the “market” interest rate on a fixed rate loan of that length. There are also additional fees and closing costs for this loan as well.
To obtain either of these government home improvement loans a borrower could do a simple Internet search, visit their local bank and veterans could make a trip to their state’s Department of Veterans Affairs office.