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HUD 203(K) Rehabilitation Loan - Detail Verified 08/23/10 Last Updated 02/25/2009

Program Overview

HUD 203(K) Rehabilitation Loan - Detail Verified 08/23/10 Last Updated 02/25/2009 is a government sponsored program designed to allow owner-occupants to obtain one loan for the purchase of residential property (1-4 units) that needs repair work. Loans include funds for rehabilitation work. This program is available nationwide.

Who is eligible for this program?

Must meet FHA qualifications; housing expense ratio no more than 29% of gross monthly income; debt ratio 41% of gross monthly income. Gift funds from immediate family members may be used for down payment. No payment reserves required. Is this program for first time buyers only? No

Property Eligibility Requirements

Eligibility requires that the 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: residential; 1 to 4 units

Benefit Details

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 adequate approval from the lender. Benefit: 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 completionof work is determined 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 points. Closing costs may also be financed.

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