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FHA Proposes To Make Home Rehabilitation Programs More Effective

The proposed changes to the rehabilitation mortgage insurance program will expand FHA-insured mortgage financing for families buying single-family homes. 

November 30, 2023

The Federal Housing Administration has proposed some changes to its 203(K) Rehabilitation Mortgage Insurance Program for the industry feedback today. The program is meant to help borrowers purchase a home and include the cost of repairs in one new mortgage. The new changes will update key provisions of the program and make it more useful for today’s market. Besides this, the changes will also increase flexibility for borrowers and decrease burdens for lenders, consultants, and other participants. 

HUD’s Secretary Marcia L. Fudge said, “At HUD, we are focused on ensuring Americans can make the repairs necessary to keep their homes safe and energy efficient. Thanks to the enhancements we proposed today, home rehabilitation will be more accessible for millions of homebuyers and homeowners through the Federal Housing Administration.”

FHA’s standard 203(K) Program can be used for remodeling and structural repairs such as repairing a foundation. However, the Limited 203(K) Program can be used only for minor renovation and non-structural repairs such as installing energy-saving improvements. 

HUD’s Assistant Secretary Julia Gordon said, “We are committed to making this program work well for the nation’s homebuyers and homeowners. 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 proposals announced today include increasing the maximum allowable rehabilitation costs from $35000 to $50,000, updating the 203(K) consultant fee schedule, increasing the draw amount to 75% of material costs, and increasing the allowable rehabilitation period from six to 10 months. 

The thoughtful responses received turned out to be instrumental in developing the proposed policy updates. 

FHA is requesting feedback on its proposed 203(K) program by January 5, 2024.

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The content provided in this article draws inspiration and includes quotes from various reputable sources, including news articles, government data, and interviews. Affordable Housing 411 strives to ensure accuracy and credibility, but the information presented may be based on some external sources. We encourage readers to refer to the referenced materials for more in-depth insights and verification.


Department of Housing and Urban Development. “FHA Proposes Enhancements to Make Home Rehabilitation Program More Effective for Homebuyers and Homeowners”. Department of Housing and Urban Development, November 29, 2023,

FHA Proposes Enhancements to Make Home Rehabilitation Program More Effective for Homebuyers and Homeowners | / U.S. Department of Housing and Urban Development (HUD)

Last Updated: September 20, 2021