Exciting Changes for Homebuyers: HUD Mortgagee Letter 2024-13
Hello, Metro Detroit and Michigan homebuyers! There’s some great news from the U.S. Department of Housing and Urban Development (HUD) that could make your dream home even more affordable and easier to renovate. HUD’s latest Mortgagee Letter 2024-13, which goes into effect on November 4th, 2024, brings updates to the 203(k) Rehabilitation Mortgage Insurance Program, and here’s what you need to know.
What is the 203(k) Program?
The 203(k) program helps homebuyers and homeowners get financing for home repairs and renovations. It’s an FHA-insured loan that rolls the cost of the home and the cost of improvements into one mortgage. This is great if you want to buy a fixer-upper or need to make some changes to your current home.
Key Updates from Mortgagee Letter 2024-13
- Higher Limits for Repairs: The amount you can finance for repairs under the Limited 203(k) program has increased from $35,000 to $75,000. This means you can do more extensive renovations without needing to use the Standard/Full 203(k). This is HUGE!
- More Time for Renovations: The time allowed to complete renovations has been extended. You now have up to 12 months for the Standard 203(k) program, up from 9. and 9 months for the Limited/Streamline 203(k) program, up from 6.
- Consultant Fees Covered: If you choose to use a 203(k) Consultant, you can now include their fee in the total mortgage amount for the Limited/Streamline 203(k) program. This makes it easier to get professional help with your project. Previously if you chose to use a 203(k) Consultant on a Limited/Streamline 203(k) it was an unfinanceable fee and paid out-of-pocket.
- Updated Consultant Fees: The fees consultants can charge have been increased to reflect modern costs and to encourage more consultants to join the program. This is the first update to these fees since 1995! We desperately need more 203(k) consultants.
- Better Support for Occupancy: If repairs prevent you from living in your home, the number of days before these repairs are considered major has increased from 15 to 30 days.
How This Helps You
These changes make the 203(k) program more flexible and beneficial. You can now tackle bigger projects, have more time to complete them, and get the professional help you need without worrying about extra costs. This is especially helpful in areas like Metro Detroit and throughout Michigan where many homes could benefit from repairs and upgrades.
Making Homeownership Easier
HUD’s updates aim to support affordable housing and help more people achieve their homeownership dreams. By making it easier to finance and complete home improvements, these changes can help revitalize neighborhoods and improve the quality of housing.
For more detailed information, you can visit HUD’s official announcement on their website.
Happy home buying and renovating!