203k Loans. Turning “Fixer-Uppers” into Dream Homes
If you want to buy a home that needs repair or finance needed repairs to your current home, the Section 203(k) loan program by the U.S. Department of Housing and Urban Development (HUD) may be a good option for you.
This program allows you to finance the purchase of a house—or refinance your current mortgage—and include the cost of its repairs through a single mortgage.
The Section 203(k) loan program
is HUD’s primary program for the rehabilitation and repair of single family properties. Section 203(k) loans are provided through HUD-approved mortgage lenders nationwide and insured by the Federal Housing Administration (FHA), which is part of HUD.
“Section 203(k)” refers to the law, part of the National Housing Act, which allows FHA to make this mortgage insurance available. The loans are beneficial for low- and moderate-income individuals or families since the loan down payment can be as little as 3.5 percent. While individuals, local governments, and nonprofit organizations may participate as borrowers in the program, the property must be used as a principal residence by an individual or family.