Rehabilitation Mortgage Insurance
Program Funding
Annual program obligations reported to SAM.gov.
Program Objective
FHA's 203(k) Rehabilitation Mortgage program is HUD's primary program for the rehabilitation and repair of one to four family properties. It is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. The 203(k) program works with either a purchase or refinance transaction and allows the cost of making repairs and/or improvement to be included in the loan amount.
Eligibility
Eligible Applicants
- Nonprofit Organization
- Homeowner
Individual and families.
How to Apply
Award Procedure
See Application Procedure.
Decision Timeline
- Approval: From 15 to 30 days
Approval decision is made by a HUD-approved lending institution.
Program details & compliance
Description
The program helps homeowners or homebuyers to finance the cost of repairs or improvements to their existing home or a home they intend to purchase.
Mission Categories
Primary: Property and Mortgage Insurance
Use of Funds
Allowed Uses
These loans may be used to rehabilitate an existing 1 to 4 unit dwelling in one of four ways: (1) Purchase a structure and the land on which the structure is located and rehabilitate it; (2) purchase a structure on another site, move it onto a new foundation on the mortgaged property and rehabilitate it; or (3) refinance the existing lien secured against the subject property and rehabilitate such a structure. Maximum insurable mortgage loans for an occupant mortgagor are the same as prescribed for Section 203(b) - Program 14.117. HUD offers two 203K rehabilitation loan programs. The limited 203 (k) program does not require a minimum amount of repair costs but the program is capped at a total of $35,000 for the cost of improvements/repairs (with exceptions to $50,000 for properties located in Opportunity Zones). The other program is the Standard 203(k). A minimum of $5,000 of repair/improvement costs are required but, there are no limitations on the amount of the repair/improvements. However, statutory loan limits apply. HUD insures lenders against loss on the 203(k) loan prior to the rehabilitation/improvements are completed.
Required Documentation
Documentation regarding the characteristics of the property and the qualifications of the borrower are assembled by the lender and submitted with the application. This program is excluded from coverage under OMB Circular No. A-87.
Lenders must be approved by FHA to participate.