Mortgage bankers are trying to convince the Department of Housing and Urban Development to allow investors to utilize a government-insured program that finances property improvements. Rental properties had previously been banned from the program due to abuse by non-profit organizations, crooked lenders and other players. Section 203(k) rehabilitation loans are insured by the Federal Housing Administration. The program enables the rehabilitation and repair of single-family properties. But a moratorium on the program prohibits use of 203(k) loans for rental properties and properties used as short-term investments.
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