What improvements are eligible under the Standard 203(k)?

Types of eligible improvements include, but are not limited to:
• converting a one-family structure to a two-, three-, or four-family structure;
• decreasing an existing multi-unit structure to a one- to four-family structure;
• reconstructing a structure that has been or will be demolished, provided the complete existing foundation system is not affected and will still be used;
• repairing, reconstructing or elevating an existing foundation where the structure will not be demolished;
• purchasing an existing structure on another site, moving it onto a new foundation and repairing/renovating it;
• making structural alterations such as the repair or replacement of structural damage, additions to the structure, and finished attics and/or basements; (Any addition of a structure unit must be attached to the existing structure)
• rehabilitating, improving or constructing a garage;
• eliminating health and safety hazards that would violate HUD’s Minimum Property Requirements (MPR);
• installing or repairing wells and/or septic systems;
• connecting to public water and sewage systems;
• repairing/replacing plumbing, heating, AC, and electrical systems;
• making changes for improved functions and modernization;
• making changes for aesthetic appeal;
• repairing or adding roofing, gutters and downspouts;
• making energy conservation improvements;
• creating accessibility for persons with disabilities;
• installing or repairing fences, walkways, and driveways;
• installing a new refrigerator, cook-top, oven, dishwasher, built-in microwave oven, and washer/dryer;
• repairing or removing an in-ground swimming pool;
• installing smoke detectors;
• making site improvements;
• landscaping;
• installing or repairing exterior decks, patios, and porches;
• constructing a windstorm shelter; and
• covering lead-based paint stabilization costs, if the Structure was built before 1978, in accordance with the Single Family mortgage insurance lead-based paint rule (24 CFR 200.805 and 200.810(c)) and the U.S. Environmental Protection Agency’s (EPA) Renovation, Repair, and Painting Rule (40 CFR 745, especially subparts E and Q).

All improvements to existing structures must comply with HUD’s Minimum Property Requirements (MPR) and meet or exceed local building codes. For a newly constructed addition to the existing structure, the energy improvements must meet or exceed local codes and the requirements of the latest energy code standard that has been adopted by HUD through a Federal Register notice.

Any addition of a structure unit must be attached to the existing structure.  Site improvements, landscaping, patios, decks and terraces must increase the As-Is property value equal to the dollar amount spent on the improvements or be necessary to preserve the property from erosion.

You may find an FHA-approved lender in your area using the Lender Locator at: https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist.   The Lender Locator is not an all-inclusive list of lenders currently participating in a particular program such as HECM, 203(k), Title 1, etc.  Please contact the listed lenders to confirm their participation in each specific HUD/FHA program.  You can also find lenders in your area using your local telephone directory under the heading "Mortgages."

For additional information see Handbook 4000.1 II.A.8.a.vi(A) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-01994