Hallelujah! HUD finally updates, expands 203(k) program
The
U.S.
Department
of
Housing
and
Urban
Development
(HUD)
on
Tuesday
announced
that
it
has
published
updated
policies
for
its
203(k)
Rehabilitation
Mortgage
Insurance
Program,
in
an
effort
to
“modernize
the
program
and
enhance
its
usefulness
for
individuals
and
families
seeking
affordable
financing
for
renovating
or
rehabilitating
a
single-family
home
when
purchasing
or
refinancing
it.”
The
updates
were
announced
by
Federal
Housing
Administration
(FHA)
Commissioner
Julia
Gordon
and
Philadelphia
Mayor
Cherelle
Parke
at
the
home
of
a
Philadelphia
resident
who
used
the
program
to
renovate
his
home.
The
203(k)
program
allows
the
inclusion
of
repair
or
renovation
costs
inside
a
single
mortgage
used
to
purchase
or
refinance
a
home,
and
covers
structural
repairs
(foundations
and
new
roofs),
modernization
of
kitchens
and/or
bathrooms
as
well
as
energy
efficiency
or
climate
resiliency
projects.
HUD
said
that
these
new
enhancements
are
“expected
to
meaningfully
increase
usage
of
the
program
and
is
an
important
component
of
the
Biden-Harris
Administration’s
efforts
to
address
the
nation’s
housing
supply
challenges,”
according
to
HUD.
203(k)
contains
two
separate
programs:
“standard”
for
substantial
repairs,
and
“limited”
for
more
minor
repairs
or
renovations.
Updates
have
been
made
to
both
variations.
These
updates
include
increasing
total
allowable
costs
under
the
limited
product
from
$35,000
to
$75,000
along
with
an
annual
review
of
these
totals
to
address
the
impacts
of
market
conditions
on
costs;
an
extension
of
the
rehabilitation
period
on
both
products,
to
12
months
on
standard
and
nine
months
on
limited;
admitting
the
financing
of
a
203(k)
consultant
if
a
borrower
elects
to
use
one;
and
increasing
the
allowable
fees
a
consultant
can
levy,
the
first
update
to
such
fees
since
1995.
Gordon
said
that
these
updates
were
a
long
time
coming.
“The
changes
we
are
announcing
today
for
the
203(k)
program
are
long
overdue
and
will
support
greater
use
of
this
program
where
it
is
needed
most
–
in
neighborhoods
where
homes
are
affordable
but
need
repair,”
Gordon
said.
“Increased
use
of
203(k)
mortgages
will
help
modernize
and
revitalize
homes,
which
supports
affordable
housing
supply
and
strengthens
neighborhoods.”
Simmons
also
described
the
utility
of
his
own
203(k)
loan.
“Thanks
to
this
crucial
program,
I
was
able
to
make
renovations
to
my
home,”
said
Simmons.
“I’m
ecstatic
to
see
that
HUD
and
the
Biden-Harris
Administration
are
making
improvements
to
enhance
and
expand
this
program,
so
thousands
more
homeowners
can
make
fixes
to
their
homes.”
“HUD
has
programs
not
only
to
help
families
purchase
a
house,
but
to
help
them
repair
their
homes,”
said
Acting
HUD
Secretary
Adrianne
Todman.
“Today,
we
are
modernizing
and
expanding
this
program,
helping
both
homebuyers
and
homeowners
fix
up
their
homes.
This
is
one
more
action
the
HUD
and
the
Biden-Harris
Administration
is
taking
to
improve
our
country’s
housing
supply.”
Soon
after
the
announcement,
FHA
released
a
mortgagee
letter
(ML)
detailing
the
implementation
of
these
updates
to
the
203(k)
program.
The
ML
detailed
that
the
updates
apply
to
all
FHA
case
numbers
assigned
on
or
after
Nov.
4,
2024.
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