The FHA 203k is a loan program to rehabilitate and repair the properties of a single family. It is designed by FHA, Federal Housing Administration which works under HUD, Department of Housing and Urban Development. HUD targets revitalization of community and neighborhood, and expansion of home ownership. This loan program is used efficiently by lenders with the help of the state, local agencies and some other organizations which do not aim to make profit. Borrowers are able to use the money from lenders and some other financial resources to rehabilitate their home. CRA, Community Reinvestment Act, sets some responsibilities on lenders and FHA 203k program help them to meet those.
FHA 203k program can be used in three ways.
– To buy a house and the land it is located, rehabilitation of the house.
– To buy a house on another area, move it on the mortgaged property and rehabilitation of the house.
– To repay the existing debts and rehabilitation of the house.