HUD's 203(k) Rehabilitation Program Effectively Restores Communities and Increases Homeownership Opportunities
Rehabilitating a home through HUD's 203(k) Rehab Program involves various single family mortgage insurance programs administered by the FHA. According to HUD, the mortgage loans are obtained through FHA-approved lenders, which submit applications to conduct credit approval of the buyer and have the property appraised. The lenders fund the mortgage loans that are then insured by HUD.
Importantly, the 203(K) Rehab Program is HUD's most effective and used program for the rehabilitation and repair of single family homes. Thus, it is an invaluable resource for community and neighborhoods that wish to restore and renew the homes in their area, and as a result, also expand opportunities for homeownership. Restoration and revitalization of communities is HUD's primary goal, and the 203(k) Rehab Program is intended to maintain importance and support amongst HUD and its participating lenders.
Eligible properties include one-to-four family dwellings that have existed for more than a year, and newly constructed units must be attached to the existing home. Homes that have been demolished, or that will be destroyed as a result of rehabilitation, are also eligible as long as some of the existing foundation system remains. The program can also be used to convert a one-family home into a two, three, or four-family dwelling, and along the same lines an existing multi-family unit can be decreased.
The program has seen success, as many lenders have used it in partnership with state and local housing agencies, as well as nonprofits, to renew communities and restore homes. Interestingly, much of 203(k)'s success is because lenders have utilized other resources in tandem with the program, such as combining it with financial programs such as HUD's HOME, HOPE, and Community Development Block Grant Programs. When lenders combine the rehab program with further financially supporting efforts, the result is not only increased assistance for borrowers, but also a clear demonstration by lenders of their commitment and desire to help lower income communities. Furthermore, when lenders are working to meet the standards and responsibilities set by the Community Reinvestment Act (CRA), their work contributes to HUD's commitment to increasing homeownership possibilities for the less privileged.
For more information about the FHA 203(k) and CE Classes contact Diego Hodge at 770.753.6239 or email at Diego.Hodge@renovationmp.com.
Renovation Mortgage Plus is America's FHA 203(k) Authority * GRML 21936