About the HUD 203K Loan Program
An important tool for community and neighborhood revitalization and for expanding homeownership opportunities
Most mortgage financing plans require improvements to a home be finished before a long-term mortgage is made. A 203K loan allows the borrower to get just one mortgage loan to finance both the acquisition and the rehabilitation of a property. The mortgage us set at a long-term fixed (or adjustable) rate; the amount is based on the projected value of the property with the work completed, taking into account the cost of the work.
Funds designated for the rehabilitation or improvement are placed in an interest bearing escrow account and released by the lender through a Write-Up and the Draw Request, obtained from a HUD-approved consultant/inspector, who verifies the work is complete.