Realtors Want Investor Access to FHA Rehab Loans

The Department of Housing and Urban Development should reopen the FHA 203(k) loan program to investors temporarily so they can purchase and renovate rundown foreclosed properties, according to the National Association of Realtors. "Investors utilizing the 203(k) program could purchase dilapidated foreclosed properties for rehabilitation and conversion to rental properties," NAR says in a letter to HUD secretary Steve Preston. Federal Housing Administration 203(k) loans cover the cost of buying a property and the estimated renovation costs in a single transaction. HUD closed the 203(k) program to investors in the late 1990s because of fraud and mounting loan losses. The NAR suggests allowing investors to participate in the FHA program for three years.