STILL UNDER CONSTRUCTION

Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.

The FHA 203K program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling. An existing multi-unit dwelling could be decreased to a one- to four-family unit.

FHA 203k can be used for mixed use properties to rehab the residential portion under the following conditions:

A. The property has no greater than 25 percent (for a one story building); 33 percent (for a three story building); and 49 percent (for a two story building) of its floor area used for commercial (storefront) purposes

B. The commercial use will not affect the health and safety of the occupants of the residential property

C. The rehabilitation funds will only be used for the residential functions of the dwelling and areas used to access the residential part of the property.


The minimum $5000 in repairs on a FHA 203K must be used for rehab not simple cosmetic repairs such as painting, a new door (that replaces an already functional one that is not in need of repair but looks nicer), minor landscaping, etc. Cosmetic repairs are allowed and can be financed once the initial $5000 is spent on an item that FHA considers to be a rehab item. The following are examples of rehab items:

1. Structural alterations and reconstruction (repair or replacement of structural damage, chimney repair, additions to the structure, installation of an additional bath, skylights, finished attics and/or basements, repair of termite damage and the treatment against termites or other insect infestation, etc.).

2. Changes for improved functions and modernization (e.g., remodeled bathrooms and kitchens, including permanently installed appliances, i.e., built-in range and/or oven, range hood, microwave, dishwasher).

3. Changes for improved functions and modernization (remodeled bathrooms and kitchens, including permanently installed appliances, i.e., built-in range and/or oven, range hood, microwave, dishwasher).

4. Elimination of health and safety hazards (including the resolution of defective paint surfaces or lead-based paint problems on homes built prior to 1978).

5. Changes for aesthetic appeal and elimination of obsolescence (new exterior siding, adding a second story to the home, covered porch, stair railings, attached carport).

6. Reconditioning or replacement of plumbing (including connecting to public water and/or sewer system), heating, air conditioning and electrical systems. Installation of new plumbing fixtures is acceptable, including interior whirlpool bathtubs.

7. Installation of Well and/or Septic System. The well or septic system must be installed or repaired prior to beginning any other repairs to the property. A \ property less than 1/2 acre with a separate well or septic system is not acceptable; also, a property less than one acre with both a well and a septic system is unacceptable. Lots smaller than these sizes usually have problems in the future; however, the local HUD Field Office can approve smaller lot size requirements where the local health authority can justify smaller lots. The installation of a new well or the repair of an existing well (used for the primary water source to the property) can be allowed provided there is adequate documentation to show there is reason to believe the well will produce a sufficient amount of potable water for the occupants. (A well log of surrounding properties from the local health authority is acceptable documentation.)

8. Roofing, gutters and downspouts. Flooring, tiling and carpeting. Energy conservation improvements (new double pane windows, steel insulated exterior doors, insulation, solar domestic hot water systems, caulking and weatherstripping, etc.).

9. Major landscape work and site improvement (patios, decks and terraces that improve the value of the property equal to the dollar amount spent on the improvements or required to preserve the property from erosion). The correction of grading and drainage problems is also acceptable. Tree removal is acceptable if the tree is a safety hazard to the property. Repair of existing walks and driveway is acceptable if it may affect the safety of the property. Fencing, new walks and driveways, and general landscape work ( trees, shrubs, seeding or sodding) cannot be in the first $5000 requirement.

10. Improvements for accessibility to a Disabled Person (remodeling kitchens and baths for wheelchair access, lowering kitchen cabinets, installing wider doors and exterior ramps, etc.).