Build your dream home with the FHA 203k or
Conventional renovation loan programs...
203K General Information
An important tool for community and neighborhood revitalization, the FHA
203(k) loan offers flexible qualifying and low down payments:
- FHA down payment (3.5%)
- Flexible credit qualifying
- Assumable loans
- Finance up to 6 months of mortgage payments
- Purchase or Refinance and Improve all in one loan
The 203(k) loan program offers borrowers the resources to rehabilitate a
home that may be in need of repair, either the home that they currently live
in, or that special fixer-upper opportunity. One single loan is used to pay
for the purchase (or refinance) and the cost of renovating the home.
Made available to certain lenders by the U.S. Department of Housing and
Urban Development (HUD), the FHA 203(k) program has already provided many
buyers with the funds necessary to buy their first home, or greatly improve
a move-up home. The FHA 203(k) loan is available to borrowers of all income
levels, to homeowners who plan to occupy the house, and for homes with one
to four units.
- 203K Eligible Borrowers:
- Owner Occupants - Purchase - Refinance
- Investors NOT allowed
- Eligible Properties:
- Single family dwellings
- Mixed Use (Storefront)
- 1-4 Unit buildings- you can increase or decrease the number of units
with this loan.
- Structural Alteration and Reconstruction:
- Changes for improved functions and modernization
- Elimination of health/safety hazards
- Changes for aesthetic appeal
- Plumbing, heating air conditioning, and electrical upgrades
- Well and/or septic repairs
- Roofing, gutters and downspouts
- Flooring, tiling and carpeting
- Energy conservation improvements
- Major landscape work and site improvement
- Access for the disabled
- Home Inspection:
The cost of your construction is estimated by an FHA Approved 203(k)
consultant (estimator). The cost consultant assists you in determining the
scope of repairs and the costs budgeted for the renovation job.
- Perform a home inspection to create preliminary costs estimates
based upon FHA minimum property standards plus the scope of work as
defined by the home owner/buyer.
- Once project has been determined, the cost consultant prepares a
"work-write up" and 3 contractor bid packages are issued to the home
The appraiser will be given a copy of your "work-write up" to estimate an
after improved value for your new home or current home. We
loan against that improved value thus giving you credit for the work to be
- Other Eligible Costs:(THESE COSTS MAY BE
FINANCED INTO THE MORTGAGE LOAN)
- Contingency reserve (10%-20%)
- Up to 6 months PITI mortgage payments
- Permit costs
- Consultant fees
- Inspection and title update fees
- Architectural & Engineering fees (if needed)
- 7 Simple Steps to Buying a House Using FHA 203(k) Renovation Loan.
- Locate the home you want and submit a contract for purchase -
contingent on a home inspection.
- After your contract is signed, schedule a home inspection with a
203(k) cost consultant to budget your renovation.
- If you approve the budget, the 203(k) cost consultant will prepare
the work write up for the appraiser and lender, and will prepare three
contractor bid packages for you.
- You can now bid your job to general contractors, or multiple
- Appraiser uses work write-up to value home as if all work is
- Loan closing (30 to 45 days average).
- Within 30 days of closing start project with general contractor, or