As home values continue to decline and the cost to live in and heat the same home goes up, many homeowners are left shrugging their shoulders. However, waiting in the wings may be a bit of good news, an underutilized loan program guaranteed by the federal government.

To make it easier for consumers to obtain home improvement loans, the Federal Housing Authority established the FHA Title I loan program. Used for property improvements, rehabilitation or repairs to improve the basic livability of a home, Title I loans do not require any home equity. Under the Title I program, approved lenders make loans from their own funds to eligible borrowers to finance home improvements; the Department of Housing and Urban Development insures the lender against any potential loss.

Auburn Savings Banks is a local FHA/HUD approved lender. Senior Vice-President and Loan Manager Bruce Ray says that as people are finding they have less equity in their homes, home equity loans may no longer be an option. “Since Title I loans don’t require the homeowner to have equity, this becomes a nice option. It is also attractive for those who may earn too much for other programs such as Home Energy Loan Program.”

“Many Mainers are going to find it difficult to heat their home this winter. This money can be used to make the changes that will help with efficiency and bring down the costs associated with being comfortable this winter,” says Ray. Loans are available for up to $25,000 for single family homes; funds cannot be used for “luxury” items, such as swimming pools or hot tubs.

An added benefit is the potential for an increase in value of the home, according to Ray. Energy efficient homes are a sought after commodity. “Potential home buyers are looking for newer windows, roofs, and heating systems. Any work done to improve the efficiency of a home is likely to help when it comes time to sell.”

The application and approval process for FHA Title I loans also make the program attractive to prospective borrowers. Turn around time is quick, closing costs are low and the application is easy to complete.

For more information on the Title I Loan program, visit www.auburnsavings.com or call 782-7256.