The Office of the Comptroller of the Currency is urging national banks to take a look at the Federal Housing Administration loan program that can be used to restore foreclosed homes and help stabilize neighborhoods.
The FHA 203(k) program provides government insured financing for the purchase and renovation of a property in a single loan transaction.
The OCC promoted the benefits of FHA 203(k) loans in a recent issue of its magazine Community Development Insights.
"This product can be used by banks to develop new business, mitigate risk, enhance profitability, as well as assist in the revitalization and stabilization of neighborhoods negatively impacted by the current foreclosure crisis," the OCC says in the magazine.
FHA Commissioner David Stevens said he welcomes the OCC's efforts to increase bank participation in the FHA loan program.
"With so many bank-owned properties in need of repairs, this program offers a great way for homebuyers to finance both the purchase and rehabilitation of these homes," he said.