What Property is Eligible for Rehab Financing?

Rehab financing is not for all properties.

This website is for HUD homes and HUD has made the decision which HUD home is eligible for rehab financing. But some visitors of this website may decide to buy something other than a HUD house, maybe another type of foreclosed property.

203K rehab loan can be used to purchase property other than HUD homes.

Eligible Property:

1. Property must be a one-four-family dwelling that has been completed for at least one year. Cooperative units are not eligible.

2. Even homes that have been demolished are eligible if some of the existing foundation system remains in place.

3. An existing house or modular unit on another site can be moved to the mortgaged property.

4. A FHA 203K mortgage may be originated on a "mixed use" residential property. Part of the use can be for homes, part for commercial use. There are restrictions.

5. 203K rehab loans can be used for individual units in condominium projects that have been approved by FHA or VA.

6. The needed repairs have to exceed $5,000.

7. The property has to appraise for the purchase price plus rehab costs after the renovations are completed.

It is important to select an experienced lender among the rehab lenders. Not all FHA approved lender are approved to do FHA 203K mortgage loans. The rehab lenders have special training in rehab financing.