On Tuesday, the Department of Housing and Urban Development (HUD) announced significant updates to the Federal Housing Administration (FHA) 203(k) Rehabilitation Mortgage Insurance Program. Key changes include increasing the allowable total rehabilitation costs under the Limited 203(k) program from $35,000 to $75,000, with an annual review to ensure market relevance. The rehabilitation period has been extended to 12 months for the Standard 203(k) and nine months for the Limited 203(k). Additionally, the 203(k) Consultant Fee can now be financed in the total mortgage amount for the Limited 203(k), and allowable fees for consultants have been increased for the first time since 1995 to better compensate them and encourage participation. Over the past year, the Mortgage Bankers Association (MBA) has actively advocated for these enhancements, which are now reflected in HUD's recent Mortgagee letter.
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Katelynn Harris Walker
Associate Director | Affordable Housing Initiatives
Mortgage Bankers Association
(910) 228-1746
khwalker@mba.org------------------------------