HUD 203(k)

The Department of Housing and Urban Development’s 203(k) program is HUD’s primary program for the rehabilitation and repair of single family properties. Murphy’s Quality Inspections has approved HUD 203(k) consultants on staff that perform HUD consulting services throughout central North Carolina, and in association with the Carolina Area Network of Real Estate Inspectors (CANOREI), we can provide HUD 203(k) consulting services throughout most of the state.

When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan. The program can also be used to rehabilitate of modernize a primary residence of an existing homeowner. For more information, click here.

The 203(k) consultant will meet with the prospective homebuyer (or current homeowner) to review the prospective project to verify that it qualifies for the program. We will also meet with the contractor and review their cost estimate to verify that the charges are reasonable and customary. We also work with the lender and complete all program paperwork needed for submission. As the work progresses on the rehabilitation, we perform draw inspections to verify that the work is done before payment is disbursed to the contractor.

For more information on our services, contact us at (336) 509-4596 or

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