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Homeownership is still a dream for many Americans, but the high prices<\/a> (average home prices are up 2.6% year over year, per Zillow data<\/a>), and high mortgage rates (6.72% for a 30-year loan at press time, per Bankrate<\/a>) of today’s real estate market are keeping it just that \u2014 a dream.<\/p>\n That’s why so many social media posts<\/a> touting a “new” program where you can pause mortgage payments for 12 months through a Federal Housing Administration (FHA) loan, keep popping on your feed. In one video that has since gone viral, a Utah-based real estate investor notes that a “game-changing update” to the FHA’s 203(k) Rehabilitation Mortgage Program<\/a> means that “buyers can now purchase a fixer-upper with no mortgage payments for up to 12 months.”<\/p>\n Related:<\/b> Barbara Corcoran Says This Is the One Question to Ask Before Selling Your Home<\/a><\/p>\n “That means you can renovate before your first bill is due, making homeownership more affordable for those who want to buy a home that needs work,” he continues. “This is huge for first-time buyers who want to build instant equity and investors looking to flip or create rental income without the pressure of immediate payments.”<\/p>\n But is there a catch?<\/p>\n Melissa Cohn<\/a>, a 43-year mortgage industry veteran<\/a> and the regional vice president of William Raveis Mortgage, tells Entrepreneur<\/i> that, while it is a “real program,” there are a few caveats.<\/p>\n The program is “only for people who are purchasing a home as a primary residence,” Cohn says, adding that the program is not at the borrower’s discretion. Instead, it’s determined by the HUD counselor.<\/p>\n And the “catch” is that you are still paying it \u2014 just not until the reno is over.<\/p>\n “The payments are not paused,” Cohn said. “They are still owed, but get added to the total loan amount.”<\/p>\n Related: <\/b>Barbara Corcoran Says She Doesn’t Look at Resumes: ‘Always Hire Attitude Over Experience’<\/a><\/p>\n Finally, the “monthly payments can only be deferred while the house is uninhabitable,” she said.<\/p>\n Meanwhile, Nadia Evangelou, National Association of Realtors<\/a> senior economist and director of real estate research, told Newsweek<\/i> that this loan has been around for many years.<\/p>\n “What’s new \u2013 is that HUD extended the period for financing mortgage payments from six months up to 12 months,” Evangelou told the outlet<\/a>. “This loan helps buyers to have some cash flow during renovations, but they will need to pay these mortgage payments in the long run.”<\/p>\n<\/p><\/div>\n