Home Improvement Loan Information

Following is general information you may find helpful regarding the FHA Title I Home Improvement Loan Program available at Alaska USA.


Home improvement loan proceeds may be used to finance alterations, renovations, repairs, or additions that improve the basic livability or utility of a property. Examples of eligible improvements include:
  • additional living space
  • new roof
  • new flooring
  • electrical wiring
  • plumbing
  • new built-in appliances
  • new porch or awnings
  • new garage
  • heating system
  • new cabinets and countertops
  • fence repair or installation
  • driveway or walkway
  • sheetrocking or painting
  • installation of approved well and/or septic system

The improvements must become a permanent part of the real property (or mobile home, if applicable) and must be started after approval of the loan application. In addition, they cannot be considered luxury items as defined by the Federal Housing Administration (FHA), a department within the U.S. Department of Housing and Urban Development (HUD). Examples of ineligible improvements include:

  • swimming pools
  • saunas
  • tennis courts
  • green houses
  • hot tubs
  • personal property that is not permanently attached to the home
  • barbecue pits
  • TV antennas or satellite dishes
  • airplane hangars
  • landscaping
  • kennels

Qualifying property

The property to be improved must be a member-owned, one-to-four family dwelling located in the states of Alaska or Washington. If new construction, the home must have been completed and occupied for at least 90 days. The loan will be secured by the recording of a Deed of Trust on the property to be improved and must be in first, second, or third lien position. Loans in third lien position are allowed only if: a) the principal balance is $7,500 or less, or b) the first and second mortgages were used in the initial acquisition of the home, or c) a state or local government agency provided funds for a down payment assistance program, resulting in a second mortgage for those funds.

Loan limits

Up to 100% of the cost of the improvement can be financed.  Mobile home improvement loans may be granted in amounts up to $5,000 on owner-occupied units only.

Loan terms

The maximum term of the loan is dependent upon the loan amount that you receive. The interest rate applicable to new FHA Title I loans is established by the Board of Directors from time to time based upon market conditions; however, the interest rate in effect at closing will apply to the loan over its life. The current interest rate applicable to this loan program appears on the Rates page. Listed below are the terms that you can expect with the associated loan amounts:
Loan amount Maximum term
1 - 2,500 48 months
2,501 - 7,500 84 months
7,501 - 12,500 120 months
12,501 - 17,500 180 months
17,501 - 25,000* 240 months

*Maximum loan amounts for duplex, triplex and four-plex units are $24,000, $36,000, and $48,000, respectively, but special conditions and restrictions apply on loans in excess of $25,000. No more than $12,000 may be invested in each unit.

Improvement documentation

FHA requires that the intended improvements be documented for the loan file. This includes the borrowers written summary of the planned improvements with estimated cost information. Copies of bids for materials, and from contractors when applicable, must be provided.


All loan funds will be disbursed directly to the borrower a few days after loan closing. A certificate of completion will be required when the improvement is done, and a final inspection will also be necessry as specified by HUD. Program regulations require that all variances from the submitted improvement plan be reported to HUD. Consequently, borrowers should submit a change request letter to the credit union for approval if they desire to amend their plans to ensure that the changes meet HUD program requirements.


Typical loan costs for this type of financing are listed below.
  • Initial FHA insurance premium (usually 1% of the loan amount). Subsequent FHA insurance premiums will be billed annually at the same amount as the initial fee.
  • $99 Loan Processing Fee (currently waived).
  • After the loan has been fully paid, a fee will be required by the title company to remove the Deed of Trust.

Borrower qualifications

Borrowers must have good credit histories and sufficient monthly income to satisfactorily service the proposed loan. If there were past credit problems, there should be no ongoing problems or negative items in the credit record during the past two years other than minor entries. FHA requires written explanations of any negative credit issues. Total monthly obligations, including the proposed loan payment, should not exceed 45% of the borrowers gross monthly income. However, every borrower's situation is unique and is reviewed accordingly.


Completed applications may be submitted at any branch office, faxed to (907) 929-6665, or mailed to Alaska USA's Real Estate Telephone Loan Center at P.O. Box 196613, Anchorage, AK 99519-6613. If you have any questions about this program or wish to submit an application telephonically, please call the Real Estate Telephone Loan Center. In Anchorage, please call 786-2800. In all other locations, please call (888)-425-9813. Please be aware that once the loan has been closed, there is a mandatory delay of 3 business days before any loan funds can be disbursed as required by federal regulation.

*Last updated 01/06/2014.