FHA Waiver for Limited 203k Properties

On January 24 2018, the Federal Housing Administration (FHA) issued a temporary waiver of its Limited 203k program policy regarding the time period in which borrowers may be prevented from occupying the property as a result of repairs in determining whether a repair is considered “major.” The temporary waiver applies to Limited 203(k) mortgages closed on or before June 30, 2018, secured by properties in the Commonwealth of Puerto Rico.

  • FHA’s Limited 203(k) program may be used to finance minor remodeling and non-structural repairs up to $35,000. Included in the Single Family Housing Policy Handbook1 (SF Handbook) is a list of eligible improvements (Section II.A.8.a.vii.(A)(1)) and a list of ineligible improvements (Section II.A.8.a.vii.(B)).
  • Under ineligible improvements, policy states that “major” rehabilitation or remodeling is not allowed. FHA defines “major” rehabilitation or remodeling, in part, as a repair that prevents the borrower from occupying the property for more than 15 days.
  • Due to the large number of properties damaged by Hurricane Maria in the Commonwealth of Puerto Rico, FHA is temporarily waiving its 15-day rehabilitation period as it relates to its definition of a “major” repair.
  • The temporary waiver will allow for the use of FHA’s Limited 203(k) program for financing of minor repairs in which the borrower is prevented from occupying the property for more than 15 days. However, FHA is not waiving the requirement that a borrower occupy the property within 60 days.

Click here to view/print Limited 203k Waiver

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Thank You,

The www.easy203kpro.com Team

 

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