Looking for money to make home improvements?

Are you a home-buyer who’s looking to get “more home for your money”? What buyer isn’t, right? Or perhaps you’re a current homeowner who would like to make some much-needed repairs to your home. If so, keep reading…

A HUD-insured 203(k) loan may just be the financing tool you need to buy or create your perfect home! With a 203(k) loan, available through any FHA-approved lender, you can purchase or refinance a property PLUS include the costs of making repairs and improvements (not just energy-efficient improvements either).

You could also combine the 203(k) financing with other financing options as well. Consider having a home energy audit completed at the same time and you could also qualify for an Energy Efficient Mortgage, which offers either a lower interest rate, fewer points, or even a reimbursement for the cost of the energy audit. (For more information on Energy Efficient Mortgages, see my earlier blog entry on the topic.)

What properties are eligible?

  • 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.
  • In addition to typical home rehabilitation projects, this program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling. An existing multi-unit dwelling could be decreased to a one- to four-family unit.
  • HUD also permits Section 203(k) mortgages to be used for individual units in condominium projects that have been approved by FHA, the Department of Veterans Affairs, or are acceptable to Fannie Mae and Freddie Mac guidelines.

You can use the 203(k) program to finance such items as painting, room additions, decks and other items even if the home does not need any other improvements. However, there are some requirements that MUST be completed as part of the overall rehab. These health, safety, and energy improvement requirements must be satisfied before the other improvements can be made.

For more information on the HUD 203(k) Home Loan program, check out the Home Improvement page on HUD‘s web site. For the detailed requirements of the program, visit the Rehab A Home page as well. For a listing of HUD-approved Lender’s visit their Lender List and find a lender near you. And as always, you can check my web site at CyberGreenRealty.com for more localized information on the Boston green real estate market.

Until next time, Peace!



2 responses to this post.

  1. Thank you for taking the time to put this together. Most informative.


  2. Tim, lets have some fun with your post. My favorite type property is mixed use but wanted to let your readers know that you can take any type building with a one year old CO and turn it into a 1-4 family residential property. We have turned warehouses into live/work and 8-1 bedroom units into a fourplex with 1-3 bedroom and 3-4 bedroom units making it much easier to rent and a strong positive cash flow for the borrower. Have fun with your 203k loans.


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