On this page
- FHA Title 1 loan: the quick answer
- How an FHA Title 1 loan works
- FHA Title 1 loan limits and terms
- Title 1 loan requirements for borrowers, homes and repairs
- FHA Title 1 loan rates and monthly cost
- Title 1 vs 203(k) vs a home equity loan or HELOC
- How to get an FHA Title 1 loan
- Pros and cons of a Title 1 loan
- FHA Title 1 loan FAQ
- Next steps
An FHA Title 1 loan is a fixed-rate home improvement loan that a private lender makes and HUD insures. On a single-family home you already own, HUD’s current limit is $25,000, and you don’t need equity or an appraisal. HUD also sets no minimum credit score, so the lender decides based on your payment history and debts.
FHA Title 1 loan: the quick answer
FHA’s two main home improvement loans are Title 1 and 203(k). A Title 1 loan pays for repairs on a home you already own, while the FHA 203(k) loan adds repair costs to a mortgage when you buy or refinance. So if you want an FHA home improvement loan for the house you live in now, start with Title 1.
On a one-unit home, an FHA Title 1 loan offers:
- Loan amount: up to $25,000, and up to $7,500 with no lien on your home.
- Equity: none required.
- Appraisal: not needed to make the loan.
- Credit score: HUD sets no minimum, although a lender can set its own.
- Rate: fixed for the life of the loan, with no prepayment penalty.
- Term: six months to 20 years (plus 32 days).
As a result, the program suits a homeowner who needs a roof, furnace or similar repair but has too little equity for a HELOC. HUD also says so on its Fixing Up Your Home page: “If the equity in your home is limited, the answer may be an FHA Title I Property Improvement Loan.” For other choices, see these home renovation options with little equity.
How an FHA Title 1 loan works
A HUD-approved Title I lender makes the loan, while HUD insures that lender against loss. You apply with the lender and repay it, so its rate and fees matter most.
For that coverage, HUD collects an annual premium of 1% of the original loan amount. That comes to $250 a year on a $25,000 loan, and there is also no upfront premium. The premium is the lender’s obligation, but the lender may pass it on to you if it fully discloses the charge.
In a direct loan, you apply to the lender yourself. In a dealer loan, however, a contractor or supplier helps you apply or obtain the loan. Either way, you repay a HUD-approved Title I lender.
HUD’s official name is the Title I Property Improvement Loan program, because it comes from Title I of the National Housing Act. Most borrowers write “Title 1,” so this article does too, except when it quotes HUD.
FHA Title 1 loan limits and terms
Your loan can cover the cost of the eligible work plus financeable fees, up to HUD’s limit for your property type:
| Property type | Maximum loan, secured | Maximum loan, unsecured | Longest term |
|---|---|---|---|
| One-unit home | $25,000 | $7,500 | 20 years and 32 days |
| Two units | $24,000 | $7,500 | 20 years and 32 days |
| Three units | $36,000 | $7,500 | 20 years and 32 days |
| Four units | $48,000 | $7,500 | 20 years and 32 days |
| Five or more units | $60,000 | $7,500 | 20 years and 32 days |
| Manufactured home classified as real property | $25,090 | $7,500 | 15 years and 32 days |
| Manufactured home classified as personal property | $7,500 | $7,500 (lien optional) | 12 years and 32 days |
These are the limits in HUD Handbook 4000.1 as revised in August 2026. Congress raised the legal ceiling in July 2026, but HUD has not yet published new limits, so ask your lender what applies.
The two-unit limit is lower than the one-unit limit because HUD’s rule caps a multifamily loan at $60,000 or an average of $12,000 per unit, whichever is less (24 CFR 201.10). Also, if you hold more than one Title 1 loan on a property, the combined balances can’t exceed the largest limit. For financing the home itself, see our FHA manufactured home guidelines.
Title 1 loan requirements for borrowers, homes and repairs
HUD sets the program rules. In addition, lenders may add stricter rules of their own, called overlays.
Borrower requirements
- Ownership: at least a one-half interest in the property, through title, a long-term lease or a recorded land installment contract.
- Credit score: HUD sets no minimum. Instead, the underwriter studies your overall pattern of payments.
- Credit history: the underwriter may treat your payment history as acceptable if you paid housing and installment debts on time for 12 months, with no more than two 30-day late payments in 24 months, and no major problems on revolving accounts in the past 12 months. If your history falls short, the loan can be approved only if the lender documents that the late payments came from extenuating circumstances.
- Debt-to-income ratio (DTI): your total monthly debts, including the new payment, can reach 45% of income. With one compensating factor, such as reserves equal to three monthly payments, the cap rises to 47%.
- Federal debt: you can’t be delinquent on a federal debt, so the lender checks HUD’s CAIVRS database.
- Underwriting: the lender reviews the file itself, because Title 1 loans can’t go through FHA’s automated TOTAL scorecard.
- Age: HUD also sets no maximum age.
Property requirements
In general, the home must have been completed and occupied for at least 90 days before you apply. However, you don’t have to be the one who lived there, and the 90 days need not be the latest 90. A vacant house qualifies if someone lived there for 90 days at some point, while a new build that hasn’t reached 90 days does not.
HUD does not require you to live in the property, except for a manufactured home, which must be your principal residence. A home that will stay subject to a PACE (property assessed clean energy) obligation is ineligible. Also, Title 1 requires no hazard insurance, but a secured loan on a home in a FEMA flood zone requires flood insurance.
When the loan needs a lien
A loan of $7,500 or less can be unsecured. Above that amount, or once your Title 1 balances together top $7,500, the lender must secure the loan against the property. The lien can sit in first or second position, so with a mortgage in place, a secured Title 1 loan usually becomes a second mortgage.
HUD allows a third lien only in narrow cases, and it specifically bars one when the existing second is a HELOC, a HECM or another reverse mortgage. Therefore, a HELOC already on your home can block a secured Title 1 loan. An unsecured loan of $7,500 or less, though, needs no lien.
Eligible and ineligible improvements
The work must “substantially protect or improve the basic livability or utility” of the property. In general, it must also be permanent, hard-wired or hard-plumbed. Here are examples from HUD’s lists:
| Eligible | Not eligible |
|---|---|
| Roofing and siding | Swimming pools and pool enclosures |
| Furnaces and central air conditioning | Outdoor fireplaces and barbecue pits |
| Plumbing and electrical wiring | Landscaping |
| Windows, insulation and flooring | Irrigation systems |
| Kitchen and bathroom work | Debt consolidation |
| Additions and structural changes | Portable appliances, such as a stand-alone freezer |
| Solar and wind systems you fully own | Exterior hot tubs, saunas and spas |
Work must start after the lender approves the loan, except for disaster repairs and emergency work done up to 30 days before you apply. You can also act as your own contractor. In that case, the loan pays for materials and hired tradespeople, but not for your own labor.
FHA Title 1 loan rates and monthly cost
HUD does not set a Title I rate. Instead, you and the lender negotiate it, and HUD’s Title I program page says it is “generally based on the most common market rate in the area.” The rate also stays fixed for the full term, and HUD bars adjustable rates, temporary buydowns and prepayment penalties. Since rates vary by lender, compare written offers before you choose.
Say you borrow $25,000. The table shows the monthly principal and interest at three example rates, which are not quotes. The payments also exclude the insurance charge and any fees.
| Example rate | 15-year term | 20-year term |
|---|---|---|
| 8% | $238.91 | $209.11 |
| 10% | $268.65 | $241.26 |
| 12% | $300.04 | $275.27 |
A longer term lowers the payment but raises the total interest. At 8%, for example, the 20-year loan costs about $7,200 more in interest than the 15-year loan. In addition, if the lender passes the 1% annual insurance charge to you, your cost rises, so ask for the disclosure that shows it.
Title 1 vs 203(k) vs a home equity loan or HELOC
Title 1 is one FHA home improvement loan, while the 203(k) is the other. A home equity loan or HELOC, by contrast, has no FHA backing.
| Option | What it pays for | How much | Key requirement |
|---|---|---|---|
| FHA Title 1 loan | Repairs on a home you already own | Up to $25,000 on a one-unit home | No equity or appraisal needed |
| Limited 203(k) | A purchase or refinance plus minor, nonstructural repairs | Up to $75,000 in repairs | Repairs done within nine months |
| Standard 203(k) | A purchase or refinance plus remodeling and larger repairs | At least $5,000 in repairs | A 203(k) consultant is required |
| Home equity loan or HELOC | Almost any purpose | Set by the lender, based on your equity | You need equity; see HELOC vs home equity loan |
Title 1 fits when you own the home, the job costs $25,000 or less, and equity or credit stands in the way of a HELOC. A 203(k), however, fits when you’re buying or refinancing and want the repairs in the mortgage. For non-FHA options, see our home improvement loans guide.
How to get an FHA Title 1 loan
- Get written estimates. HUD advises getting more than one, because the cheapest isn’t always the best fit.
- Find a Title I lender. Search HUD’s lender list with the Title I Property Improvement insurance type. Then call to confirm the lender still makes these loans.
- Apply. You list the planned work on the application, and then the lender verifies your income, debts and credit.
- Close. You sign the loan documents, as well as lien documents for a loan above $7,500.
- Start the work after approval. Except in a disaster or emergency, the loan can’t cover work you began earlier.
- Finish and certify. Complete the work within six months of closing, although the lender can extend that by six months. Afterward, you sign a completion certificate, and for a loan of $7,500 or more, the lender also inspects the work.
HUD also warns borrowers to read what they sign and to “Beware of Fraud.” On the completion certificate, you confirm that the contractor gave you nothing worth more than $25 to take the loan. Because HUD does not guarantee the work, don’t sign the certificate until the job is done.
Pros and cons of a Title 1 loan
Pros:
- No equity or appraisal needed
- HUD sets no minimum credit score
- Fixed rate with no prepayment penalty
- Up to $7,500 can be unsecured, so a small job needs no lien
- Also works on manufactured homes and buildings with two or more units
Cons:
- $25,000 limit on a one-unit home
- Not every lender makes Title I loans
- The 1% annual insurance charge may be passed on to you
- Not eligible for FHA’s automated TOTAL scorecard, and a 45% DTI cap (47% with a compensating factor)
- Pools, landscaping and debt consolidation are ineligible
- An existing HELOC can block a secured loan
FHA Title 1 loan FAQ
What credit score do I need for a Title 1 loan?
HUD sets no minimum credit score for the Title I program. However, a lender can set its own minimum as an overlay, so ask before you apply.
Do I need equity for an FHA Title 1 loan?
No. HUD doesn’t require equity or a cash investment, although a loan above $7,500 needs a lien on the home.
Does a Title 1 loan require an appraisal?
HUD doesn’t require an appraisal to originate a Title 1 loan. Instead, the loan amount depends on the cost of the work, up to HUD’s limit.
Who qualifies for an FHA Title 1 loan?
An owner with at least a one-half interest, an acceptable payment record and a DTI within 45% (47% with a compensating factor) can qualify. In addition, the home must have been occupied for 90 days, and you can’t owe delinquent federal debt.
Can a Title 1 loan pay for a pool or landscaping?
No. HUD lists swimming pools, pool enclosures, outdoor fireplaces, landscaping and irrigation systems as ineligible. It excludes work that does not become a permanent part of the property and luxury items.
Can I get a Title 1 loan on a manufactured home?
Yes, if it’s your principal residence. HUD’s handbook sets the limit at $25,090 over up to 15 years and 32 days for a home classified as real property, or $7,500 over up to 12 years and 32 days for one classified as personal property.
Next steps
An FHA Title 1 loan makes the most sense for a needed repair of $25,000 or less on a home with little equity. Get written estimates first, then compare lenders’ rates, fees and handling of the 1% insurance charge.
For the full rules, see section II.E of HUD Handbook 4000.1.
