HUD May Open 203(k) Loans To Investors

The Sarasota Herald-Tribune is reporting that HUD may consider opening FHA insured 203(k) loans to investors.

According to mortgageorb.com, the 1996 moratorium on investors obtaining 203(k) loans may be lifted. "HUD Secretary Shaun Donovan is on the record saying that the FHA intends to reopen the program to investors," the online newsletter wrote.Additionally, the article quotes a Federal Housing Administration spokesman as saying FHA is "currently evaluating options for reopening the 203k program to investors" and "It just seems to be a win-win on many levels."

The program allows an purchaser to obtain an FHA insured loan on properties requiring over $5,000 of renovations to meet insurability standards. Currently this loan structure is only available to owner-occupant buyers.  Opening this up to investors could help revitalize the sagging housing market.