1. Any one to four unit properties, provided they have been completed and obtained a certificate of occupancy for at least one year, in compliance with local zoning regulations.

2. Homes that have undergone demolition or partial razing during the rehabilitation process can be restored, provided the existing foundation system remains intact and unaffected.

3. Properties allow for the relocation of a home onto the mortgaged property, with the condition that the proceeds from the sale of the previous location are not released until a proper foundation inspection is conducted, ensuring satisfactory attachment to the new foundation.

4. Properties that a buyer intends to convert, whether from a single-family unit to a two- to four-family dwelling, or vice versa. Remarkably, this program even supports the conversion of 5-8 unit properties into 1-4 unit configurations, offering a high degree of flexibility.

5. Manufactured homes, constructed after June 15, 1976, and situated on a permanent foundation for over one year. The unit must have been delivered to the site when new, prior to occupancy.

6. Mixed-use residential properties are eligible under specific conditions, including restrictions on commercial floor space not exceeding 49%. This change in guidelines took effect in September 2015. The commercial use must not compromise the health and safety of residential occupants, and rehabilitation funds must solely be allocated to residential functions and access areas.

7. Condominiums are eligible but exclusively for homeowners.

8. In areas with a two-block radius, there is a limitation of seven rental units. However, purchasing two fourplexes is permissible as long as the buyer intends to reside in one unit, as it doesn't count towards the seven-unit limit.

Diverse Opportunities at Your Fingertips

🔹 Mixed-use properties are prime candidates for renovation, with the condition that the commercial space occupies less than one floor of the structure and commercial operations do not compromise occupant health and safety. [FHA 203k only]
🔹 Transform non-residential or mixed-use properties into residential spaces, expanding your horizons. [FHA 203k only]
🔹 Explore the possibility of converting larger properties into 3 or 4 unit dwellings, capitalizing on the potential of the FHA 203k program.
🔹 For homebuyers and non-profits refinancing a property within six (6) months of purchase using the 203(k) loan, it's treated as if the property was initially purchased with a 203(k) insured loan.
🔹 If legally separated or divorced, borrowers can qualify as first-time homebuyers without the typical three-year waiting period, even if they previously shared an interest in a home with their spouse, provided they no longer have an interest in the property.
🔹 Non-profit organizations have the flexibility to purchase, rehabilitate, and choose between selling or retaining properties. When intending to maintain a property as a rental, keeping acquisition and rehabilitation costs to a minimum is advisable to maximize cash flow potential.

Eligible Property Improvements

On a standard 203k loan, the subject property must meet a minimum requirement of $5,000 in eligible and necessary improvements. These improvements can encompass repairs to a detached garage, the addition of a new detached garage, or even the inclusion of an attached unit (provided it complies with local zoning ordinances) within this initial $5,000 threshold.

The mortgage must encompass one or more of the following items:

1. Structural Repairs and Alterations: This covers additions to the structure and repairs addressing any structural damage.

2. Functionality and Modernization: Includes upgrades such as remodeled kitchens and bathrooms.

3. Aesthetic Enhancement and Obsolescence Removal: This category encompasses new exterior siding and doors.

4. Plumbing, Heating, Air Conditioning, or Electrical Systems: Repair or replacement of these systems, including the installation of new plumbing fixtures like interior whirlpool-type bathtubs.

5. Well and/or Septic System Installation or Repair: A prerequisite before commencing other property repairs, with potential limitations for properties less than one acre in size. This falls under the full or standard 203k category.

6. Flooring Replacement: This includes flooring, carpeting, or tiling.

7. Energy Conservation Improvements: New dual-pane windows and doors, storm windows, insulation, and solar domestic water heating systems are eligible.

8. Major Landscape Work and Site Improvements: Patios, terraces, and other enhancements that either add value to the property equal to their cost or are essential for erosion prevention.

9. Handicapped Accessibility Improvements: Retrofitting for handicapped accessibility can be incorporated into the rehab cost, offering potential collaboration opportunities with vocational rehab companies and disability-related organizations.

In addition to the minimum $5,000 requirements, the following items are also eligible:

🔹 New cooking ranges, refrigerators, and standalone appliances.
🔹 Cosmetic repairs, such as painting.
🔹 Fencing, new walks, driveways, and general landscape work, including trees, shrubs, or seeding.
🔹 Repair of an existing swimming pool without a set dollar limit.

Please note that items that won't become a permanent part of the property and luxury items, including but not limited to new swimming pools, exterior hot tubs, saunas, spas, tennis courts, and barbecue pits, are not eligible under this program.