What Is an FHA 203k Loan?

Introduction

An FHA 203k loan is an FHA-insured mortgage that finances both the purchase and renovation of a home. It comes in two types: limited (smaller projects, up to $35,000) and standard (larger renovations). See What Is a Renovation Loan, What Is an FHA Loan, and What Is a Construction Loan.

Frequently Asked Questions

What is an FHA 203k loan?

An FHA 203k loan is an FHA-insured mortgage that finances both the purchase and renovation of a home. The loan amount is based on the home's value after improvements.

What is limited vs. standard 203k?

Limited 203k: smaller renovations (up to $35,000), simpler process. Standard 203k: larger renovations, structural work allowed, requires a HUD consultant.

What are the down payment requirements?

Same as regular FHA: 3.5% down with a 580+ credit score, or 10% with lower credit. The down payment is based on the purchase price plus renovation costs.

What work can be financed?

Structural repairs, kitchen/bath remodels, HVAC, roofing, and more. Luxury items (e.g., pools) may not be eligible. Limited 203k has caps on certain repairs.