this U.S. Department of Housing and Urban Development (HUD) announced Tuesday that it has released updated policies for the 203(k) Rehabilitation Mortgage Insurance Program in an effort to “modernize the program and enhance its benefits to individuals and families seeking affordable financing to renovate or rehab single-family homes.” Practicality” when purchasing or refinancing a home. “
These updates are provided by federal housing administration (FHA) Commissioner Julia Gordon and Philadelphia Mayor Cherelle Parker at the home of Philadelphia resident Kasan Simmons, who took advantage of the program to renovate own house.
203(k) 計劃允許將維修或翻新費用納入用於購買或再融資房屋的單一抵押貸款中，並涵蓋結構維修（地基和新屋頂）、廚房和/或浴室的現代化以及能源效率或氣候復原力project.
HUD said the new enhancements are “expected to meaningfully increase use of the program and are an important component of the Biden-Harris Administration’s response to the nation’s housing supply challenges.”
203(k) consists of two separate programs: “Standard” for large-scale repairs and “Limited” for more minor repairs or renovations. Both versions have been updated.
These updates include increasing the total allowable costs for limited products from $35,000 to $75,000 and conducting an annual review of these totals to address the impact of market conditions on costs; extending the remediation period for both products to the standard 12-month remediation period , extending the limited remediation period to nine months; allowing financing of borrowers if they choose to use 203(k) advisors; increasing the allowable fees that advisors can levy, the first update to such fees since 1995.
Gordon said these updates have been a long time coming.
“The changes to the 203(k) program we are announcing today are long overdue and will support greater use of the program where it is needed most — in communities where homes are affordable but in need of repairs,” Gordon said. “Increased The use of 203(k) mortgages will help modernize and revitalize housing, supporting affordable housing supply and strengthening communities.”
Simmons also described the purpose of his own 203(k) loan.
“Thanks to this important program, I was able to renovate my home,” Simmons said. “I’m pleased to see improvements being made by HUD and the Biden-Harris Administration to strengthen and expand this program so more homeowners can repair their homes.”
“HUD’s programs not only help families buy homes but also help them repair their homes,” said HUD Acting Secretary Adrianne Todman. “Today, we are modernizing and expanding the program to help homebuyers and homeowners renovate their homes. This is another action by HUD and the Biden-Harris Administration to improve our nation’s housing supply.
Shortly after the announcement, FHA issued a Mortgagee Letter (ML) detailing the implementation of these updates to the 203(k) program. ML details that the update applies to all FHA case numbers assigned on or after November 4, 2024.
this Mortgage Bankers Association (MBA) praised the move in a letter house line.
“We support the FHA’s efforts to strengthen its 203(k) program and commend them for incorporating many of the recommendations we highlighted in our January 2024 letter, including increasing the cap on rehabilitation spending to $75,000 for limited programs nationwide and extending the completion time for MBA residential “To better reflect current market conditions and ensure project completion,” said Pete Mills, senior vice president of policy. “
He added: “These changes will help convert older, dilapidated homes into owner-occupied housing stock and help first-home buyers compete with fix-and-flip investors.”
this American Community Home Lender (CHLA) also issued a statement supporting the changes.
“CHLA is pleased with HUD’s announcement to expand the 230(k) program, which will significantly strengthen housing affordability measures, especially for first-time and low- and moderate-income borrowers,” said Scott Olson, its executive director. express. “CHLA has been a strong advocate for expanding the scope of the FHA program to account for increased costs. We are pleased to see enhancements like these, which make the program even more attractive to homebuyers and contractors using FHA loans.
Editor’s note: A previous version of this story misspelled the Philadelphia mayor’s last name. Additionally, citations from the Mortgage Bankers Association and American Community Home Lenders have been added.
