REHAB Home Loans


The FHA Section 203(k) insurance program enables borrowers to finance the purchase or refinance of a home and the cost of its rehabilitation through a single mortgage. This is a very important tool for community and neighborhood revitalization and for expanding homeownership opportunities. 

What makes this program unique is that lenders generally will not close the loan and release mortgage proceeds unless the condition and value of the property provide adequate loan security. When a home buyer wants to purchase a house in need of repair or modernization, the home buyer usually has to obtain financing first to purchase the dwelling, get additional financing for rehabilitation and then get a permanent mortgage when the work is completed to pay off the interim loans. The interim loans(acquisition and construction loans) involves relatively high interest rates and short amortization periods. 

The section 203(k) program was designed to address this situation. The borrower can get one long term mortgage loan at a long-term fixed or adjustable rate, to finance both the acquisition and the rehabilitation of the property. The projected loan amount is based upon the value of the property when the work is completed, taking into the account the cost of the work. 

To minimize the risk to our wholesale lender partners, the maximum allowable mortgage loan amount is eligible or endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. Our lending partners have a fully insured mortgage loan.  

If you have a large rehab project and you think this appears to be a good fit for you, please give us a call so we can review your scenario and get you started, or just APPLY HERE!  Energy efficient upgrades are also illegible for inclusion.  However, there are many great opportunities available available to you within this cost of improvement, so please call us if you have any questions about this program.  

All other FHA guidelines are the same with this loan program and can be used for a home purchase or included in a refinance for the purpose of rehabilitation.  

Please click the this link for a complete program description of the FHA/HUD 203(k) program.