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Which Properties are Eligible for a 203(k)?

Which Properties are Eligible?

The FHA 203(k) Program 


1.         Any one to four unit properties which have been completed (with a certificate of occupancy) for at least one year and are acceptable according to the provisions of local zoning requirements.


2.         Homes that have been demolished or razed as a part of the rehabilitation process can be rehabbed as long as part of the original foundation remains.


3.         A home can be moved onto a foundation on the mortgaged property, provided the proceeds from the sale of the previous location are not released until the foundation is properly inspected and the home is satisfactorily attached to the new foundation.


4.         Property conversions.  The buyer can convert a property from single family into a 2-4 unit, or from a 2-4 unit to a single family unit.  The max is a 4 unit property.  One unit must be owner occupied.


5.         A manufactured home that was built AFTER June 15, 1976, and has been on a permanent foundation for over one year. The unit must have been delivered to the site when it was new, prior to being occupied.


6.         A 203(k) can be used on a "mixed use" residential property provided it meets the following requirements:

*   The floor space used for commercial purposes does not exceed...

*   49% for any Mixed Use Residential Building

*   The commercial use does not affect the health and safety of the occupants

*   The rehabilitation funds will only be used for the residential functions of the dwelling and areas used to access the residential part of the property.


7. Cooperatives are NOT eligible.

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