FHA Seeks Input on 203(k) Rehab Mortgage Insurance Program

The Federal Housing Administration last week published a Request for Information in the Federal Register seeking public comments on ways it can enhance its Single-Family 203(k) Rehabilitation Mortgage Insurance Program.

The 203(k) program enables those purchasing or refinancing a home to obtain FHA insurance on a mortgage that will cover the current value of the home plus rehabilitation costs. FHA said it plans to update the program so that it can more effectively serve as a tool to restore single-family homes in need of renovation to productive use.

“FHA would like to offer improved options to finance the purchase or refinance of a home that needs significant rehabilitation,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “Feedback from today’s RFI will help us advance our goals to increase housing supply, reduce vacancy and blight, and expand homeownership opportunities in all communities.”

The 203(k) program currently offers two options:

• The Standard 203(k) Mortgage, used for remodeling and major repairs, has a minimum repair cost of $5,000, and requires the use of a 203(k) Consultant.
• The Limited 203(k) Mortgage, used for minor remodeling and non-structural repairs, has a maximum repair cost of $35,000 and does not require the use of a 203(k) Consultant.

The comment period is open until April 17.