Rehab a Home w/HUD’s 203(k)
The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), administers various single family mortgage insurance programs. These programs operate through FHA-approved lending institutions which submit applications to have the property appraised and have the buyer’s credit approved. These lenders fund the mortgage loans which the Department insures. HUD does not make direct loans to help people buy homes.
The Section 203(k) program is the Department’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.
Many lenders have successfully used the Section 203(k) program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203(k) with other financial resources, such as HUD’s HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers. Several state housing finance agencies have designed programs, specifically for use with Section 203(k) and some lenders have also used the expertise of local housing agencies and nonprofit organizations to help manage the rehabilitation processing.
The Department also believes that the Section 203(k) program is an excellent means for lenders to demonstrate their commitment to lending in lower income communities and to help meet their responsibilities under the Community Reinvestment Act (CRA). HUD is committed to increasing homeownership opportunities for families in these communities and Section 203(k) is an excellent product for use with CRA-type lending programs.
If you have questions about the 203(k) program or are interested in getting a 203(k) insured mortgage loan, we suggest that you contact an FHA-approved lender or the HUD Homeownership Center that serves your area.
- Introduction / 203(k) – How It Is Different
- Eligible Property / Condo Units
- How the Program Can Be Used / Ineligible Improvements / Eligible Improvements
- Required Improvements
- Determining Upon One or Two Appraisal Reports
- Recently Acquired Properties / Architectural Exhibits
- Definitions for Use in the 203(k) Program
- Maximum Mortgage Amount
- Seven Unit Limitation
- Interest Rate and Discount Points / Discount Points on Repair Costs and Fees
- Maximum Charges and Fees
- Application Process
- FAQ: Acceptable Property Types<FAQ: Borrower Eligibility / Eligible Improvements
- FAQ: Program Questions
- FAQ: Lender Questions