(Washington, DC) – The Department of Housing and Community Development (DHCD) today announced the implementation of the Home Purchase Rehabilitation Pilot Program, which will allow first-time homebuyers using the Department’s suite of Home Purchase Assistance Programs to purchase homes that require limited repairs to address health, safety and building code violations.

This program enables the use of the Federal Housing Administration’s (FHA) 203(k) Streamlined Rehabilitation Program as a first trust lending product in conjunction with the Home Purchase Assistance Program (HPAP) or other DHCD purchase assistance second trust loans.  Applicants will receive a combined purchase money loan for acquisition and repairs from the first trust lender.  The HPAP or other DHCD program loans will continue to be a second trust loan for downpayment and closing cost assistance.  The applicant must meet all DHCD eligibility requirements.

The minimum rehabilitation loan for the FHA 203(k) streamline is $5,000 and the maximum is $35,000.  The repairs must be completed within six (6) months of the loan closing date when a Home Quality Inspection (HQI) is due. 

Limited repairs, such as the repair or replacement of roofs, gutters and downspouts; repair, replacement or upgrade of existing HVAC, plumbing or electrical systems; and the purchase and installation of appliances, are permitted under the program.  The applicant must select a FHA 203(k) lender, a general contractor, and a FHA 203(k) consultant to conduct scopes of work write ups and periodic inspections of the rehabilitation work prior to funding draws.

To apply for the program, applicants should contact one of six approved Community Based Organizations (CBO).