Structural alterations and reconstruction: (Repair or replacement of structural damage, chimney repair, additions to the structure, installation of additional bath(s), skylights, finished attics and/or basements, repair of termite damage and the treatment against termites)

• Elimination of health and safety hazards.
• Changes for aesthetic appeal:
  (New siding, adding a dormer, covered porch, attached garage).
• Air Conditioning or replacement:
  (plumbing, heating, air conditioning and electrical systems).
• Installation of well, septic system or connection to public utilities.
• Roofing, Gutter Downspouts, Flooring, Tiling and carpeting.
• Major landscape and site improvement.
• Improvements to improve accessibility and functions for the disabled.

Luxury items and improvements that do not become a permanent part of the real property are not eligible as a cost rehabilitation. However, the homeowner can use the 203(k) program to finance such items as painting, room additions, decks and other items even if the home does not need any other improvements. All health, safety and energy conservation items must be addressed prior to completing general home improvements.

Required Improvements

All rehabilitation construction and/or additions financed with Section 203(k) mortgage proceeds must comply with the following:

A. Cost Effective Energy Conservation Standards

(3) Replacement Systems.
          a) Heating, ventilating, and air conditioning system supply and return pipes and ducts must be insulated
             whenever they run through unconditioned spaces.
         b) Heating systems, burners, and air conditioning systems must be carefully sized to be no greater than 15
            percent oversized for the critical design, heating or cooling, except to satisfy the manufacturer’s next 
            closest nominal size.  

B. Smoke Detectors. Each sleeping area must be provided with a minimum of one (1) approved, listed and labeled
      smoke detector installed adjacent to the sleeping area.