What is Rehabilitation?

Rehabilitation in Relation to FHA 232 Loans

Rehabilitation is defined as the tools, materials, labor, and other costs associated with improving buildings, excluding routine and/or minor repairs. HUD 232 loans can be used for substantial rehabilitation of properties intended for senior citizens, including skilled nursing and assisted living facilities. However, to qualify for a HUD 232 loan for substantial rehabilitation, the rehabilitation must involve replacing two major building systems, and the costs must equal or exceed 15% of the estimated fair market value of the property, or $6,500 per unit.

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