Can nonprofit entities participate in the Section 203(k) Rehabilitation loan program?

HUD-approved Nonprofits are eligible for the same FHA-insured financing as owner-occupants, including the use of FHA’s Section 203(k) Rehabilitation Program.
A nonprofit is prohibited from further borrowing under its FHA Mortgagor approval if the nonprofit has 10 or more incomplete 203(k) developments at any given time.
Nonprofit agencies with an exceptional performance record of successfully completing 203(k) developments (defined as those agencies that have successfully completed 20 or more 203(k) developments) may apply to the jurisdictional Homeownership Center (HOC) for a waiver of the limitation on 203(k) Mortgages. This waiver request must contain:
  • a narrative describing the nonprofit agency's homeownership or long-term rental program;
  • current audited financial statements with an unqualified opinion from a Certified Public Accountant (CPA) for the prior three years;
  • a listing of all Properties currently owned by the nonprofit agency (both conventional and government-financed);
  • a record of performance on all 203(k) Mortgages (current as well as previous Loans); as well as the evidence to support the sale or rental of these Properties.
Nonprofit agencies that are approved for this waiver, for financing for more than 10 203(k) Mortgages at one time, will have it stated in their approval letter from the HOC.
For more information see Handbook 4000.1 I.B.4. at
The  FHA-Approved Nonprofits web page is available at
The 203(k) Rehabilitation Mortgage Insurance page is located at

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-02338