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FHA Title 1 Loans: What You Need to Know

You don't need equity in your home to get an FHA Title 1 loan, but there are maximum loan amounts to consider.

Bella Angelos
Chris Jennings
Updated
FHA Title 1 loans are a little-known financing tool for home improvements and repairs. The FHA is well-known for helping first-timers buy a home, and Title 1 loans are a way for homeowners to finance permanent property improvements and renovations.
Home buyers can also piggyback a Title 1 loan onto their purchase mortgage to fix up a property they’re buying.

What is an FHA Title 1 loan?

An FHA Title 1 loan is a fixed-rate loan used to finance home improvements, repairs and rehabilitation projects. These loans are issued by an FHA-approved lender. Adjustable-rate loans are not available under the program.
Title 1 loans under $7,500 generally do not require the home to be used as collateral, while larger loans typically require a lien on the property.
The definition of FHA Title 1 loan “improvements” is fairly broad: The Department of Housing and Urban Development (HUD) says the money can be used for anything that protects your home or makes it safer, more comfortable or more functional.
Eligible improvements may include:
  • Kitchen appliances, such as built-in ovens, dishwashers, refrigerators and freezers.
  • Accessibility upgrades for people with disabilities, such as ramps or wider doorways.
  • Energy-efficient improvements, including new windows, insulation and solar energy systems.
In general, if the project improves your home's safety, livability or functionality, it may qualify for an FHA Title 1 loan.

FHA Title 1 loan details

The 21st Century ROAD to Housing Act, which was signed into law on July 11, 2026, officially raised loan limits for FHA-insured manufactured housing, such as FHA Title I loans. Below are the new limits:
  • Maximum loan term: Up to 30 years, as determined by HUD. 
  • Single-family property improvement loan: Up to $75,000.
  • Multifamily property improvement loan: Up to $37,500 per unit, with a maximum of $150,000 per loan.
  • Manufactured home loans:
    • Up to $106,405 for a single-section manufactured home.
    • Up to $195,322 for a multi-section manufactured home.
    • Up to $149,782 for a single-section manufactured home and lot.
    • Up to $238,699 for a multi-section manufactured home and lot.
    • Up to $43,377 for a manufactured home lot only.
The Act also expands eligible uses for FHA Title 1 loans by allowing financing for the construction of an accessory dwelling unit (ADU). In addition, HUD is required to update loan limits annually with changing housing costs.
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Requirements for an FHA Title 1 loan

There are few HUD-specific hurdles to clear to get an FHA Title 1 loan. Specific requirements include:
  • The house must have been built and occupied for at least 90 days
  • You need to own the home, have a long-term lease or purchase the property under a land installment contract
  • Loan proceeds must be verified as used for specifically intended property improvements
  • An annual FHA mortgage insurance premium of $1 per $100 of the amount of the loan will be charged or built into your interest rate
  • You must have a debt-to-income ratio of 45% or less
There are no minimum credit score or income requirements set by HUD. You don’t even have to have equity in the home. However, you can expect your lender to run a credit check and review your employment history.
Before applying, compare lenders to review their interest rates, fees, eligibility requirements, and available loan terms. Even though the loan is insured by the FHA, the lender determines whether you qualify and the terms of your loan.

Who should consider a Title 1 loan?

FHA Title 1 loans may be a good fit for:
  • Homeowners with limited equity who need funds for improvements but may not qualify for a home equity loan or HELOC.
  • Homeowners who want to keep their current mortgage instead of refinancing, especially if they have a favorable interest rate.
  • Owners of eligible manufactured homes who need financing for improvements or housing-related expenses.
  • Borrowers making smaller or moderate improvements, such as energy upgrades, accessibility improvements, repairs or replacing major systems.

Alternatives loan types to consider

A Title 1 loan is not the only way to finance home improvements. Other options may be better depending on the project and your financial situation.
  • FHA 203(k) loan: Better suited for major renovations or projects that combine a home purchase or refinance with repair costs.
  • Home equity loan or HELOC: May be a good option for homeowners with significant equity who want to borrow against their home’s value.
  • Cash-out refinance: Allows homeowners to access cash by replacing their existing mortgage with a larger loan.
  • Personal loan: May work for smaller projects when a homeowner prefers not to use their home as collateral.
The best financing option depends on the size of the project, available equity and whether the borrower is improving an existing home or completing a larger renovation.

Don’t let the details drag you down

As with any government program, there are a few acronyms and a bit of bureaucracy built into FHA Title 1 loans. Here are some quick facts to help clear up any confusion:
  • The Federal Housing Administration, or FHA, is a part of the U.S. Department of Housing and Urban Development, or HUD.
  • Neither HUD nor the FHA offers loans; instead, they insure private lenders against losses from loan defaults. That encourages lenders to make FHA loans.
  • FHA loans are intended to help people of modest financial means to buy and improve their homes. They are not for luxury homes or fancy upgrades like pools and outdoor fireplaces.

How to find an FHA Title 1 loan lender

FHA Title 1 loans are offered through HUD-approved lenders, but not every lender participates in the program. If you're interested in a Title 1 loan, start by searching for an FHA-approved lender in your area using HUD's online lender search tool.
You can also contact local banks, credit unions or mortgage lenders to ask whether they offer FHA Title 1 loans.
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