Posted by Dave T on December 24, 1998 at 15:00:49:
For the last few years, HUD 203k loans were only available to owner occupants. Under the 203k program, you get 85% financing on the after fixed-up value and put 15% down yourself. The difference between the actual purchase price and the loan amount is kept in a maintenance escrow account. All repairs must be approved by HUD and inspected before funds can be disbursed from the maintenance account. After all repairs are made and HUD has closed the book on the property repairs/rehab, any funds left in the maintenance account are disbursed directly to you.
You can not use this program as an investor to fix and flip properties. This program is for the owner occupant that wants a fixer with built-in financing for the repair/rehab costs.