Can a lender process a 203(k) rehabilitation mortgage for an investor?

Not at this time. A moratorium on 203(k) investor loans was announced in Mortgagee Letter (ML) 96-59. This moratorium on 203(k) investor loans also applies to the sale of HUD-owned property.

ML 1996-59 is available at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee


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-03791