The Federal Housing Administration (FHA) recently announced changes to their 203(k) Rehabilitation Mortgage Insurance Program. NAR previously submitted comments to FHA, seeking updates to the program to ensure they remain consistent with market trends and are more accessible and streamlined for all home buyers. Specifically, FHA is updating the 203(k) loan program by:
- Increasing the maximum cost of the limited 203(k) program to $75,000 from $35,000. FHA also created an annual review process for updating the maximum allowable amount;
- Extending the rehabilitation period for the standard 203(k) to 12 months; and
- Increasing the number of months of financeable mortgage payment reserves.
The 203(k) rehabilitation mortgage insurance loan program provides low to moderate income buyers with the opportunity to purchase homes in a broader range of the market while simultaneously revitalizing housing supply stock. NAR commends FHA for modernizing the 203(k) program as home buyers are struggling with the limited housing inventory, and we look forward to continuing our work with them.
