HUD Property Improvement Loans and Home Modifications for the Elderly

Page Reviewed / Updated - Feb. 2014

Definition: HUD Property Improvement Loan

The US Department of Housing and Urban Development, better known as HUD, insures loans made by private lenders against consumer default with the intention of making it easier for families to borrow money to make home modifications. To be clear, HUD does not subsidize these loans, rather by providing insurance, they enable approved lenders to offer loans to individuals with a wider range of credit scores who might otherwise not be eligible. 

It is worth noting that HUD also provides Community Development Block Grants to local communities and cities who may, in turn, make those funds available in the form of grants to eligible seniors.  However, should such a program exist, it would be managed at the local level.  Find your local HUD office.

 If conducting further research on this option, one should be aware that HUD Property Improvement Loans are also referred to as FHA Loans, Federal Housing Authority Loans and / or the Title 1 Insurance Program.

 

Using HUD Loans to Help Aging in Place

HUD Property Improvement loans are best suited for families that wish to have an elderly loved one move onto their property instead of as a loan to the individual that requires care directly. The reason for this is that seniors in poor health with fixed incomes are less than ideal candidates for these loans as they have limited ability to re-pay them.

In the context of long term care for the elderly, these loans are often used to make a home more accessible for frail individuals, perhaps to accommodate a wheelchair or re-do a bathroom with handrails and a seated shower or walk in tub. They can also be used to build an accessory apartment that would enable an elderly relative to live on the property of their adult children or caregivers.

 Did You Know?
Seniors and their family members are eligible for a free estimate for bathroom safety modifications.  Get started here.

 

HUD Property Improvement Loans Qualifications and Limits

As these loans are made by private lenders, most eligibility requirements are specific to the lender and the market in which the loan is provided. However, HUD does mandate that to qualify the borrower must either own the property or have a lease that extends 6 months beyond the loan repayment date.

Consumers can borrow up to $25,000. The loan can be used to pay for any improvement to the safety, livability or utility of the property.

Costs and Fees

These loans are made by private lenders that charge market rates for their loans. They can be taken for a loan period of up to 20 years.

How to Apply

One must apply for a HUD loan through a HUD approved lender.  On the HUD webpage, one can find a HUD approved lender using the search tool.  More information about this program is available here.