Federal home repair grants are only available through FHA-approved lenders.
A Federal home repair grant is available through the U.S. Office of Housing and Urban Development (HUD). The grant does not come directly from HUD. Instead, HUD facilitates connections between lenders and those who wish to apply for home repair grants. According to the Federal Housing Administration (FHA), home repair grants are governed by the Section 203(k) program. Access to the Section 203(k) program is only available through FHA-approved lenders. The program may only be used for one- to four-family homes and must comply with all safety regulations as outlined by the program. Does this Spark an idea?
Instructions
1. Determine the maximum mortgage amount allowable under the Section 203(k) program by completing the 203(k) and Streamlined(k) Maximum Mortgage Worksheet available through HUD. This form should be turned in to your lender. Your lender will file it with your Section 203(k) application. Answer each question truthfully and to the best of your ability. Failure to do so could result in denial of a home repair grant or loan.
2. Notify an FHA-approved lender that you wish to purchase a property while taking advantage of the Section 203(k) program. If you already own the property, notify an FHA-approved lender that you wish to apply for a grant or loan through the Section 203(k) program.
3. Provide your lender with a completed 203(k) and Streamlined(k) Maximum Mortgage Worksheet. If you have not yet purchased the home, the lender may choose to complete most of the form. However, if you own the property, you will be responsible for the accuracy of information on the form. Your lender will sign the 203(k) and Streamlined(k) Maximum Mortgage Worksheet and include it with your loan application.
4. Wait for the loan to be approved through HUD. Once the closing paperwork has been signed, a Rehabilitation Escrow Account will be established in the property owner's name. The Rehabilitation Escrow Account will contain sufficient funds to complete all requested home improvements. HUD allows up to six months for the completion of rehabilitation. However, lenders may require project completion much sooner.
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