The Limited 203(k) Rehabilitation Mortgage Insurance Program may only be used for minor remodeling and non-structural repairs. The total rehabilitation cost may not exceed $75,000.
The Limited 203(k) total rehabilitation cost limit will be evaluated on an annual basis in conjunction with the process undertaken for the establishment of FHA’s Nationwide Forward Mortgage Loan Limits. If it is determined that an increase to the Limited 203(k) loan limit is warranted, the new limit will be announced concurrent with the publication of the Nationwide Forward Mortgage Loan Limits announcement.
Eligible Limited 203(k) improvements include, but are not limited to:
- eliminating health and safety hazards that would violate HUD's Minimum Property Requirements (MPR);
- repairing or replacing wells and/or septic systems;
- connecting to public water and sewage systems;
- repairing/replacing plumbing, heating, AC and electrical systems;
- making changes for improved functions and modernization;
- eliminating obsolescence;
- repairing or installing new roofing, provided the structural integrity of the structure will not be impacted by the work being performed; siding; gutters; and downspouts;
- making energy conservation improvements;
- creating accessibility for persons with disabilities;
- installing or repairing fences, walkways, and driveways;
- installing a new refrigerator, cooktop, oven, dishwasher, built-in microwave oven and washer/dryer;
- repairing or removing an in-ground swimming pool;
- installing smoke detectors;
- installing, replacing or repairing exterior decks, patios, and porches; and covering lead-based paint stabilization costs (above and beyond what is paid for by HUD when it sells REO properties) if the structure was built before 1978, in accordance with the Single Family mortgage insurance lead-based paint rule and the Environmental Protection Agency's (EPA) Renovation, Repair, and Painting Rule.
All improvements to existing Structures must comply with HUD’s Minimum Property Requirements (MPR) and meet or exceed local building codes. Patios and decks must increase the As-Is Property Value equal to the dollar amount spent on the improvements.
A list of ineligible improvements is available in Handbook 4000.1, Section II.A.8.a.vii(B).
To find an FHA-approved lender in your area, please visit the HUD Lender List Search (Lender Locator) web page at https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist. A "Help” screen link is available to assist you with entering search criteria. You can also reach out to lenders directly to ask if they offer FHA mortgages.
The Lender Locator is not an all-inclusive list of FHA-approved lenders currently participating in HUD/FHA programs such as 203(k). The Lender List Search Results will only list lenders who have closed at least one 203(k) within the past 12 months; however, lenders should be contacted to confirm participation in the 203(k) program. You can also locate lenders in your area using your local telephone directory under “Mortgage.”
For additional information, see:
- Handbook 4000.1 II.A.8.a.vii(A)-(B) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh