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FHA 203(k) Renovation Mortgage Programs

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If you are a DIY-er, CHFA understands that your dream home may not be move-in ready. FHA 203(k) Rehabilitation mortgages allow first-time homebuyers to take advantage of below-market interest rate loans that cover costs of purchasing and making full or limited renovations to your dream home. This program may also be used to finance abandoned or foreclosed properties. There are two types of loans, Standard or Limited, depending on the estimated cost of renovations.

 

  • benefits

    Benefits

    • Below-market interest rate. 
    • Purchase your home with the cost of renovations included! 
  • eligible-properties

    Eligible Properties

    • Single-family homes or FHA-approved Condominiums. 
    • Multi-unit properties to be converted into two- to four-family homes. 
    • The purchased property may not be designed for commercial purposes.
  • eligibility

    Eligibility Requirements

    • You must be a first-time homebuyer or have not owned a home in the past three years. 
    • The home must be become your primary residence no later than one year from closing. Investment or vacation properties are not allowed. 
    • The total purchase cost and rehabilitation costs must not exceed FHA Maximum Loan Limits.
    • You will be required to have a construction contract with a state-licensed general contractor.
    • The sales price of the home must be within the CHFA Sales Price Limits, and your gross income must be within the CHFA Income Limits.  The CHFA Resource Map can tell you if you are within program eligibility limits.    
  • dap-loans

    Renovations Covered Include:

    • Electrical
    • HVAC systems
    • Purchase new appliances (up to $2,000)
    • Roofs
    • Satisfy health and safety standards
    • Sewer hookup
    • Well and septic systems

    Any repairs that are structural in nature or in excess of $35,000 will be considered under the Standard 203(k) Rehabilitation program.

  • Targeted Area Exception

    If you have previously owned a home in the past three years, you may still be eligible if you plan to purchase in an area of the state targeted  for revitalization. CHFA will reduce your interest rate by 0.25% and waive the income limit for eligible applicants purchasing in Targeted Areas who are not applying for a Downpayment Assistance Program loan.

  • Downpayment Assistance Program (DAP) Loan

    If you have the monthly income to pay mortgage costs, but not enough savings to pay the down payment, you may qualify for a reduced-interest rate loan of at least $3,000 to cover down payment costs.

  • additional-considerations

    Additional Considerations

    • You will be required to attend a free Homebuyer Education  class prior to closing. The class will help you understand the home-buying process and offer tips for maintaining your new home. Classes are held online and at locations across Connecticut. 
    • Federal Housing Administration (FHA), Veteran Administration (VA) or USDA-(RD) mortgage insurance will be required.  
    • After closing on your loan, the funds for home repairs will be held by your lender in a separate escrow account. Your lender will handle all payments to the contractor and manage a contingency reserve of up to 20% of the rehabilitation costs. Any unused funds will be applied to the principal balance of your loan. 

To apply for the 203(k) Rehabilitation Mortgage Program contact one of these CHFA- Approved Lenders:

FHA 203(k) Lenders

Lender Contact Information
NORCOM MORTGAGE NORCOM MORTGAGE
38 Security Drive
Avon, CT 06001
Phone: 860-606-0525
Email: colleen.fazzino@norcom-usa.com
NORTHEAST FINANCIAL NORTHEAST FINANCIAL
210 South Main Street
Middletown, CT 06457
Phone: 860-788-7237
Email: drew@northeast-mortgage.com
SAVINGS INSTITUTE BANK AND TRUST ** SAVINGS INSTITUTE BANK AND TRUST **
803 Main Street
Willimantic, CT 06226
Phone: 800-423-0142
Email: Melissa_Phillips@banksi.com
WEBSTER BANK** WEBSTER BANK**
200 Executive Blvd.
Southington, CT 06489
Phone: 866-404-7040
Email: rabbott@websterbank.com
 
 
© 2018 Connecticut Housing Finance Authority. All Rights Reserved
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