FHA 203k and Preservation

FHA’s 203k rehab program has many benefits.  I’m an urban planner by training and see the great potential this program has to be a significant tool for rehabilitating much of Chicago’s historical housing stock.   My historic preservation class at the University of Illinois gave me an appreciation for different housing architectural styles.  I grew up watching “The Cosby Show” and remember vividly the beautiful, sturdy Brooklyn brownstone they called home.  Chicago has an equally rich historical housing architecture which deserves to be preserved.  When people think of Chicago architecture, it is easy to picture its grandiose skyline, but Chicago also has a rich historical architecture in its housing stock that is worth preserving.  Two of the most prominent architectural styles in Chicago are bungalows and greystones.   With so many bank-owned and distressed properties in the city, the opportunity is there for first-time homebuyers and others to utilize the FHA 203k rehab program on existing homes and realize their dreams of home ownership in an affordable manner with little money down.

In September 2000, Mayor Richard Daley launched the Historic Chicago Bungalow Initiative.  The design of the initiative is to foster an appreciation for the bungalow as a distinctive housing type and foster sympathetic rehabilitation of Chicago bungalows.  Many of these bungalows were built between 1910 and 1940 to accommodate Chicago’s rapidly growing immigrant population.  The result is a ‘bungalow belt’ that spans the city from the north to the south side.  They are typically built of sturdy brick with one and one-half stories and detailed windows and stone work on the exterior.

Inspired in part by the Historic Chicago Bungalow Initiative, the was launched in 2005 by the Civic Committee of the Commercial Club of Chicago.  The focus of the initiative has been to seek to preserve the valuable greystone housing stock in North Lawndale.  While their focus has been North Lawndale, greystone structures can be found throughout the city.  Typically, greystones are solid brick structures with limestone fronts and anywhere from 1 to 4-units  with most being 2 or 3-unit buildings.  Most were built between 1895 and 1920. Check out the book, The Historic Chicago Greystone: A User’s Guide for Renovating and Maintaining Your Home (Greystone Guides)

During the height of the housing boom, ‘new’ was in at the expense of many of these historical and architecturally significant homes that help make each neighborhood unique.  With housing speculation rampant, developers tore them down and replaced them with new, cheaper construction to woo investors.  You can see the results in any city neighborhood.  Three-story wood-frame condo buildings replaced magnificent greystones from Lawndale to Washington Park.

Building new has its advantages, but for the typical first-time homebuyer, it can be more costly than simply rehabilitating an existing structure.  It may not have been HUD’s intention with the FHA 203k to save historical properties, but it certainly can be a tremendously powerful tool now to do just that.  There is very little you cannot do with the FHA 203k.  A homebuyer can use the program to restore a property to its original state or to just update the living spaces.  Those dreaming of becoming homeowners can take part in this preservation by utilizing the FHA 203k loan to rehabilitate these properties.  If you’d like to learn more about how this program works, call Brad at Ardain Mortgage Corp, 847-963-1000.