HUD Property Improvement Loans and Home Modifications for the Elderly
What is a 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.
It is worth noting that HUD also provides Community Development Block Grants to local communities and cities that may in turn make those funds available in the form of grants to eligible seniors. However this is managed at a local level; find your local HUD office
Also worth noting is that if conducting further research on this option, be aware that HUD Property Improvement Loans are also referred to as:
-Federal Housing Authority Loans
-Title 1 Insurance Program
Using HUD Improvement 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.
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, Fees and How to Apply
Page Reviewed / Updated - May 2013