HUD 232/223(f) Non-Critical and Borrower-Elected Repairs are Back

HUD has announced, effective immediately, that it will return to its longstanding practice regarding both borrower-elected and non-critical repairs in Section 232/223(f) transactions, consistent with the current LEAN Section 232 Handbook and controlling documents.

In November, HUD shared a communication with lenders that it was changing its interpretation of financing eligible repairs. For lenders to be compliant, HUD stated that only specific repairs related to life, health and safety, environmental and governmental regulatory requirements could be included in loan proceeds.

HUD announced that it was working on further guidance, which subsequently included more detailed information on draft edits to the Section 232 Handbook – revisions that raised concerns throughout the industry as borrower-elected and non-critical repairs would no longer be financed by HUD.

This announcement is exciting news for the industry, as it once again allows for borrower-elected and non-critical repairs to be financed by HUD. Connect with a NewPoint FHA expert to learn how we can partner on your next seniors housing or healthcare investment.

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