Assistance Program Search

HUD 203(K) Rehabilitation Loan

Program Overview

HUD 203(K) Rehabilitation Loan is a government-sponsored program designed to allow owner-occupants to obtain one loan for the purchase of a house in need of repair work. Loan includes funds for rehabilitation work. This program is available nationwide.

Who is eligible for this program?

Borrowers must meet FHA qualifications. Gift funds from immediate family members may be used for the down payment, prepaids, and/or closing costs. The program provides funds for rehabilitation/repairs to property purchased up to 110% loan to value. You must supply lender with contracts from bids to do the work, and they must also get approval from the lender. Is this program for first time buyers only? Yes

Property Eligibility Requirements

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. Allowable property types: Single family, condo, townhouse, 1-4 units

Benefit Details

The borrower obtains just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work up to 110% of appraised value once completion of work is determined. The FHA limit for single-family dwellings in most Montana counties is $271,050. FHA limits for all counties can be found at: https://entp.hud.gov/idapp/html/hicost1.cfm Benefit: Purchase and rehabilitation loan. Loan Term: 30 years Homebuyer Counseling / Education Required: No Owner Occupancy Required: Yes Other Program Comments: Seller may pay up to 6% of the sales price for closing costs and prepaids.

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