Features & Guidelines ~ Eligibility ~ Property Guidelines ~ Frequently Asked Questions ~ Pre-Application
Property Guidelines
The proceeds of each R&R loan shall be used to renovate and/or repair only those existing residential properties that meet the following criteria:
- Located in the state of Pennsylvania.
- Owner-occupied by the applicant as a principal and permanent residence.
- Used as a primary residence and not a business, investment or vacation/recreational home.
- Condominium and town homes are eligible, but only that portion of the real estate owned by the applicant is eligible to be repaired/improved. Common areas owned by the association are not eligible.
- Completed property. Loan funds may not be used to renovate homes which are in the process of being constructed.
- Properties located in a 100 year flood zone are required to document flood insurance in an amount at least equal to all loans secured by the property. This can be documented by providing a copy of the declarations page for the policy.
- Proof of Homeowners Insurance in an amount at least equal to all loans secured by the property must be documented. This can be documented by providing a copy of the declarations page for the policy.
- A loan secured with an R&R mortgage shall not be made in an amount which, when combined with all other existing debts secured by the subject property, would exceed a 120 percent combined loan to value ratio (CLTV). The CLTV is determined by adding the amount of all debts secured by the property (including the R&R loan) and dividing by the value of the home’s current value as determined by a full appraisal that has been completed within the previous three years or an alternative valuation method approved by PHFA which include: an evaluation in lieu of appraisal; a drive-by (external) appraisal, or a tax assessment if completed within the previous three years and already used in other LPA programs. Automated valuation methods are not acceptable. (The home’s as-completed appraised value may be utilized only in cases where a full, current appraisal is obtained. This allows borrowers to incorporate the added value of any repairs/improvements being made with the R&R funds into the CLTV calculation and may increase the amount they can borrow.) PHFA will approve in writing the valuation method(s) to be used by each LPA.
- Two-unit properties are eligible, where the applicant resides in one of the units as a principal residence but owns both units.
- Manufactured or factory–built houses are eligible for R&R loan funds if all of the following conditions are met.
- The manufactured or factory-made house is located on property owned by the applicants or being purchased by the applicants under a real estate contract.
- The wheels, axles and trailer hitches have been removed and the home has been placed on a permanent foundation in one of two ways:
- A foundation that has footings located below the frost line and meets local code. If piers are used, they must be placed where the unit manufacturer recommends. Where state or local code requires anchors, they must be provided.
- A”Floating Slab” foundation that meets local code and manufacturer’s specifications.
- [Additional Guidance: Whenever mobile home foundations are being newly installed or replaced, the home must be permanently affixed to a foundation and in conformance with the requirements of Appendix E, “Manufactured Housing Used as Dwellings” of the International Residential Code (edition as currently adopted by the Commonwealth of Pennsylvania).
- The residence must be in a condition that can be made habitable and sanitary upon the completion of appropriate repairs with funding available from the R&R loan and any other available home improvement funding sources. In the event that this is not possible, the LPA may decline the prospective loan applicant and make a referral to the appropriate social service or other applicable agency.
917 State Street, Erie, Pennsylvania 16501 Phone: 814-453-4505; Fax: 814-454-6984