PHILADELPHIA (KYW Newsradio) — The Department of Housing and Urban Development on Tuesday announced the return of a program designed to help home-buyers purchase fixer-uppers.
Federal housing officials and Mayor Cherelle Parker stood outside the Point Breeze home of Kasan and Ikea Simmons to announce the revival of a little-used program called the 203(k) Rehabilitation Mortgage Insurance Program.
Kasan and Ikea used it to purchase and renovate the home, which has been in Ikea's family for nearly 100 years. Her great-grandmother bought the house when it was brand-new — in 1925. Over time, the list of major necessary renovations grew.
The couple were renting it from Ikea’s father, when he decided it was time to sell.
“To be honest, we were going to move out of the neighborhood, but Kasan, he saw the vision and he said, 'No, we should keep this family in the home. We have strong roots here,'” said Ikea.
“I never imagined that we could have this home and change it into the home that we wanted.”
The 203(k) program makes the most affordable homes even easier to buy by allowing borrowers to roll rehab costs into their mortgage with a minimal down payment. And it includes the services of a financial consultant.
FHA Commissioner Julia Gordon says it didn't keep up with market realities and fell into disuse, so HUD has now updated the rules to make it easier to access and more practical to use — for example: longer timelines and higher caps for the rehabs.
“We believe that what we're announcing today, the greater flexibility, more time, more compensation, will help make success stories like this one be more common throughout the country,” Gordon said.
Parker has pledged 30,000 new units of affordable housing in her first term, and she thinks some of them will come out of the 203(k) program.
“This program is one of the tools in the toolbox of federal, state and local programs that we will employ to make good on that commitment,” she said.
And the mayor can vouch for the value of 203(k). She says she used it to purchase and renovate her home in 2003.