The Federal Housing Administration (FHA) has requested industry feedback on proposed changes to its 203(k) Rehabilitation Mortgage Insurance Program, which offers homebuyers a mortgage covering the purchase or refinance of a home and the cost of repairs or rehabilitation. The proposal includes five changes and reflects input FHA received from a request for information issued back in February.
“We are committed to making this program work well for the nation’s homebuyers and homeowners,” Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said in a release. “Our proposed changes to the 203(k) program add to our larger goals of increasing both housing supply and affordability through FHA’s offerings.”
The program can be used to remodel and rehabilitate older homes. The standard program can be used for structural repairs such as a foundation and requires the use of an FHA-approved 203(k) consultant, while the limited program option may be used for minor renovation and non-structural repairs, but does not require a consultant.
The proposed changes are:
The agency said it also is proposing increases to the maximum amount for other allowable fees such as the draw inspection fee and the change order request fee. Proposed fee increases are designed to appropriately compensate consultants for their role and incent more consultants to participate in the program.
“The thoughtful responses we received from the industry through our February request for help in identifying barriers to program use were instrumental in the development of these proposed policy updates,” Deputy Assistant Secretary for Single Family Housing Sarah Edelman said. “We are looking forward to receiving feedback on the draft Mortgagee Letter so that we can move forward to final policy updates.
Interested parties have until Jan. 5, 2024, to submit their comments through FHA’s Single Family Drafting Table web page.
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