The Home Buyer's Korner

Information presented should be used for educational purposes only.

January 16th, 2017

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FHA 203K Eligibility

PrintYou may know of the standard FHA loans, but FHA 203K loans give you more flexibility when it comes to purchasing a home and completing repairs or doing a remodel after you closing on our home loan. The FHA 203K includes your principal amount to purchase the home and renovation, repairs or any remodeling expenses into one low-interest rate monthly payment. I like using a “Five Bucks per Thousand” rule when explaining an FHA 203K. With interest rates so low, today’s home buyer can basically complete their renovations or remodeling for about five dollars per $1000 when wrapping their home improvements into their FHA 203K mortgage. If you’ve gotten a credit card statement with a similar balance and seen your minimum payment, you know it’s a lot more than five bucks a month.

Home buyers have two renovation FHA insured loan programs to select from. The FHA 203K Streamline or Traditional. The Streamline allows up to $35,000 and can be borrowed for renovations, improvement or repairs not involving any structural modification and any property’s that’s deemed in need of any health and safety issues.

These loans are ideal if you’re looking to update a kitchen or remodel a bathroom and hundreds of other issues our aging homes need to get them back in top notch condition. Generally your project needs to be completed with 30 days of closing, and you can’t purchase any materials before closing, otherwise you will not be reimbursed.

Some of our FHA servicing lenders may allow for a draw up to 50 percent at closing to begin your repair and some disburse after a final inspection, so it’s important the terms work with your general contractor or vendors. The other renovation program is the FHA 203K Traditional.

The FHA 203K Traditional allows for major repairs or additional; allows for:

  1. Up to six month to complete a major renovation;
  2. FHA approve loans that will reflect up to 110 percent Loan-To-Value, based on after improved value;
  3. Allows for up to six month of principal and interest payments to be included in your mortgage, so you aren’t forced to make two house payments while your home is being remodeled;
  4. You can even move an existing home to a new site, but you’ll be responsible for the moving cost as FHA loans can’t offer term until a property is permanently affixed to the property.

It’s easy to find the wrong house in the right neighborhood and with a renovation home loan it makes it possible to turn it into the right house in the right neighborhood.

Eligible Property

  1. One to four-unit home completed for at least a year;
  2. All newly constructed units must be attached to existing dwelling;
  3. Demolished homes still remaining on existing foundation;
  4. Converting a one unit dwelling into a two, three or four unit home.


FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

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The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase


Up to $10K for Home Improvements, Renovations or a Simple Remodel

Mortgage Loan Officers, Real Estate Agents & General Contractors

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Organizing your home shopping experience affords a wise decision making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

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