Rehab Your San Diego Real Estate with HUD's 203(k) Program

The federal governments' Section 203 (k) program is designed for the rehabilitation and improvement of single family properties and is viewed as a tool for neighborhood revitalization and expanding home ownership. In the past, when a

San Diego real estate buyer

wanted to purchase a home in need of repair or modernization, he/she had to first obtain financing to finance the dwelling and then find additional financing to do the rehabilitation work. With the 203 (k) plan, however, the buyer can get just one mortgage--at a long-term fixed or adjustable rate--to finance both the purchase and the repair of the property.

USES AND APPLICATIONS: This program can be used in three ways:

1. To purchase a home and its land for rehabilitation

2. To purchase a dwelling at one site and move it to another mortgaged property for rehabilitation

3. To refinance existing secured loans on a home for rehabilitation

4. To convert a one-family dwelling to a two, three, or four family residence OR

5. To convert a multi-family dwelling to a one-family home.



1..Must be a one-to-four family dwelling that is at least one year old

2. If the dwelling has been demolished, some of the foundation must remain


1. All construction must comply with HUD Minimum Property Standards

2. All rehabilitation dealing with thermal or heating/AC systems must be energy efficient

3. Cash-paying home buyers can refinance their San Diego real estate within six (6) months of purchase in order to make improvements

As with any government funded programs, the property to be purchased is subject to appraisals to determine the “as-is” and “after rehab” values of the real estate. In addition, the homeowner will be expected to provide HUD with the following:

1. A plot plan of the site

2. Proposed interior plan of the dwelling

3. Work write-up and cost estimate

HUD also offers an FHA Streamlined 203 (k) program that allows buyers or owners of ­­­San Diego real estate to purchase or refinance a home that needs up to $35,000 of rehab/repair work. Eligible owners may borrow the money even if they don't have the equity usually required. In addition, the streamlined program requires much less paperwork than does the regular 203 (k) and thus simplifies the process for obtaining funding for improvements/repairs. Typical improvements approved for this program include such things as :

Roof, gutter, downspout repair/replacement/p>

HVAC systems

Plumbing and electrical work

Basement completion/waterproofing

Purchase of appliances

Minor remodeling of kitchens and bathrooms


Windows and doors

Decks, patios, porches