The 203K program enables HUD (Department of Housing and Community Development) to promote and facilitate the restoration of our existing housing. It is HUD’s primary program for the rehabilitation and repair of single family homes. HUD’s main goal is the revitalization and expansion of homeownership throughout our communities.
203K operates through FHA’s (Federal Housing Administration) approved lending institutions that submit applications to have the property appraised and to get the buyer’s credit approved. The 203K program allows that buyer to just have one mortgage loan, at a long-term adjustable rate to finance the purchase and rehabilitation of the property. The mortgage is based on the projected value of the property once the work is completed. Once the mortgage is disbursed and an escrow account for the rehabilitation is established, the lender will have a fully-insured mortgage loan.
Eligible properties are one-to four-family dwelling units that have been completed for at least one year. The units must meet the local zoning requirements. The program is also eligible for condominiums that have been approved by the FHA.
Only certain lenders and subcontractors are approved by the FHA to participate in this program. Flooring America/FA Design Build is an approved 203K subcontractor and we have completed several properties through this program.
Please visit www.203kplus.com for more details. Stay tuned for our next blog which will discuss the 203k Streamlined(k) program.