The 203(k) Standard product allows the borrower to finance up to 6 months worth of mortgage payments. The HUD Consultant must deem the property as uninhabitable during the renovation period. A Mortgage Payment Reserve account is set up to hold the payments.
However, if the property is a 2–4-unit property and one or more units
are occupied, the Mortgage Payment Reserve may only include the portion
of the mortgage payment attributable to the units that cannot be occupied.
Example: If the property has 3 units and one of the units can’t be occupied during renovation, then 1/3 of the monthly mortgage payment can be financed and put into a mortgage payment escrow account.
