Rehabilitation of Existing Structures with Existing Debt

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a.Rehabilitation by Current Owner. If a current homeowner wishes to undertake rehabilitation with a Section 184 loan, the existing indebtedness may be rolled into the new Section 184 loan by using a credit qualifying refinance with an appraisal (see paragraph 11-4(a)(5). The appraisal will be for the after-improved value.
b.Mutual Help Units. A Section 184 loan may be used to "pay off" a Mutual Help home so that the property may be conveyed to the homeowner. A guaranteed loan could also be used to pay off and rehabilitate a Mutual Help home. A unit developed under the Mutual Help Program is not eligible for rehabilitation with a Section 184 guaranteed loan unless the unit has been paid-off and conveyed to the homeowner. Conveyed Mutual Help units may be rehabilitated with a Section 184 loan if the property meets the criteria listed in Paragraph 4.4a above.