Program Description
When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling, then additional financing to do the rehabilitation construction, and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed or adjustable rate, to finance both the acquisition and the rehabilitation of the property. The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work.
General Program Requirements
To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.
Loan Terms
N/A
Application Process
For more information, see the Program Contact Information below.
Program Contact Information
Please visit the Rehibilitation Mortgage Insurance website at the following location for further information:
http://www.hud.gov/offices/hsg/sfh/203k/203k--df.cfm
Managing Agency
U.S. Department of Housing and Urban Development
http://www.hud.gov/
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