After many years of no change, HUD has made significant updates to the FHA 203K programs to help more families seeking affordable financing for renovating when purchasing or refinancing their homes.
FHA offers two variations of the 203(k) program: the Standard 203(k), which may be used for substantial remodeling and repairs, and the Limited 203(k), which may be used for minor remodeling and nonstructural repairs. These program enhancements will be effective for all FHA case number assigned on or after November 4, 2024.
Program enhancements:
- Increasing the allowable total rehabilitation costs a borrower can finance under the Limited 203(k) program from $35,000 to $75,000 and reviewing this limit annually to ensure it continues to keep pace with market conditions.
- Providing more time for rehabilitation and repair work to be completed by extending the rehabilitation period to 12 months for the Standard 203(k) and 9 months for the Limited 203(k);
- Increase the number of days that a borrower is unable to occupy the subject property during the rehabilitation period for Limited 203(K) from 15 to 30 days.
- Allowing the financing of the 203(k) Consultant Fee in the total mortgage amount for the Limited 203(k) if a borrower chooses to use a 203(k) Consultant.
This is a fantastic enhancement to the 203K rehab program and will give buyers much more room to find a home and make it what they want!
