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FHA 203 (k) Renovation Loans
FHA 203(k) renovation loans - purchase and renovate all in one loan
to some value restrictions, the FHA 203(k) loan program can be an excellent
choice for moderate to extensive repair. HUD and the Federal Housing
Administration are focused on maintaining America's housing stock and have
extensively improved the program. The minimum renovation amount isonly $5,000
and can we are able to lend up to 110% of the "as completed" value.
This program can be an excellent choice if you do not have significant equity in
your home and is almost always a better choice than consumer or credit card financing.
The FHA 203(k) allows homeowners and homebuyers an
opportunity to purchase or refinance existing homes and finance 110% of
the costs needed to improve the home. The 203(k) is ideal for
"fixer-uppers" or "handyman specials". The 203(k) - a
pioneer in this type of financing transaction - is actually over 30 years old,
and until 1994 was known as a horrendous web of paperwork and long delays.
However, in 1994 HUD recognized the need for assisting the aging housing stock
and restructured the 203(k) program. Today, the 203(k) is one of the fastest
growing mortgage programs in the country. However, there are some limits to FHA
financing. I also have extensive information available on Conventional
With the FHA
203k you can:
- Borrow up to 110% of the "after-completed"
- Include all repairs in the mortgage (Minimum $5,000)
- Eliminate health hazards (lead paint)
- Make structural repairs and alterations (including
- Remodel kitchens, bathrooms, etc.
- Replace siding, roof, gutters, downspouts, etc.
- Update plumbing, heating, electrical systems
- Install or repair the well and/or septic systems
- Replace flooring, carpeting or tile
- Make energy conservation Improvements: Double pane
windows and doors, insulation, caulking
- Add decks, patios, fencing
The 203(k) loan can be used on many different types of
properties (owner occupied only):
- One to four unit dwellings
- Multi-unit dwellings being converted down to one to
- Non-residential building being converted to residential
- Single family dwelling being converted to 2-4 units
- Mixed use properties: Commercial properties with
residential units attached.
- Buildings that have been raised or demolished. May be
rebuilt from the foundation.
- Refinance a property purchased with cash within the
past 6 months and receive cash back.
The 203(k) can be used for any repairs or remodeling after
a minimum of $5,000 of required and eligible repairs have been done:
Required repairs (Must be done):
- Thermal envelope: Caulking, weather-stripping,
insulation, attic ventilation.
- Smoke detectors
- Wood boring insect and moisture damage
- Well/septic repair and certification
- Elimination of health and safety hazards.
- Modernization and functional changes
- Structural alterations and additions including changes
for aesthetic appeal and elimination of obsolescence (such as siding, adding
a porch or second story)
- Addition of an attached unit(s) and/or
- Recondition/replacement of plumbing, heating, AC and
- Roofing, gutters, downspouts
- Flooring, tile and carpeting, if damaged
- Energy conservation improvements
- Major landscape and site improvements (such as
correction of grading and drainage, tree removal, patios/decks, minor
shrubbery and landscaping. Fencing is not included.)
- Handicapped accessibility
- Painting, if peeling
- Rehab or improvements to a detached building or garage.
- Repair existing walks and driveways if they present a
Acceptable after $5,000 minimum:
- New appliance
- Painting to change color for personal taste
- New carpet for personal taste.
- Installation of Well and/or Septic System
- Roofing, Gutters, Downspouts
- Flooring, Tiling and Carpeting
- Energy Conservation Improvements
- Major Landscape and Site Improvements (i.e., correction
of grading and drainage problems, tree removal, patios/decks, minor
shrubbery and landscaping. Fencing may not be in 1st $5,000.
- Handicapped Accessibility
- Painting and Carpeting (only if damaged in some way)
have added the HUD 203k question and answer page here.
HUD 203(k) Handbook has extensive and detailed
The HUD 203(k) program can be complex. I have
developed an excell spreadsheet which will clarify what is possible with the
program. Just give me a call.
Please see the Service Area tab for important
property location information.