In this article:
Substantial Renovation Definition
As defined by HUD, substantial renovation is one of the following situations:
Required replacements, repairs, and improvements that involve the replacement of two or more major building components
Rehabilitation costs exceed the greater of:
15% (exclusive of soft costs) of the property's replacement cost/ fair market value after required repairs, replacements, and improvements
$6,500 per dwelling unit (adjusted by HUD's authorized high-cost percentage)
20% of mortgage proceeds for rehabilitation expenses