Can an existing structure be moved to a new foundation using 203(k)?

The Standard 203(k) Rehabilitation Mortgage Insurance Program may be used for purchasing an existing structure on another site, moving it onto a new foundation and repairing/renovating it.  Prior to placement of the existing structure on the new foundation, the Consultant must obtain from the borrower a report from a licensed structural engineer stating that the foundation is structurally sound and capable of supporting the structure.  After placement of the existing structure on the new foundation, the Consultant must obtain from the borrower a report from a licensed structural engineer stating that the structure has been properly placed and secured to the new foundation.  The mortgagee must not release mortgage proceeds for the existing structure on the non-mortgaged property until the new foundation has been properly inspected and the structure has been properly placed and secured to the new foundation. 

The Limited 203(k) may NOT be used to purchase an existing structure on another site and move it onto a new foundation. 

For more information see Handbook 4000.1 II.A.8.a.vi.(A)(1);  II.A.8.a.vii.(B); II.A.8.a.xviii.(C)(1); II.A.9.d.iii.(A) 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-04787