FHA 203k

FHA 203k

FHA 203k

What is a FHA 203k loan?

The two types of FHA 203k loans are FHA Limited 203(k) and FHA Standard 203(k).

Eligible Properties:

  • All FHA loans are owner occupied/primary residence.
  • The property can be attached and detached single family residences, attached/detached Planned Unit Development (PUD), 2-4 unit properties, modular or factory built housing, and HUD approved Condos – walls in.
  • All types of properties are eligible for the FHA 203k include: HUD REO, short sale, distressed properties, and vacant homes.

FHA Limited 203k

  • The FHA limited 203(k) is considered limited because costs for construction, repairs, and rehabilitation may not exceed $35,000 including all financing fees.
    • The down payment is 3.5% and the minimum FICO score is 620.


The appraisals are “subject to repairs and improvements” will determine the after improved value, which will be ordered once:

  • The scope of work has been defined
  • Work plan detailing proposed repairs or improvements
  • Cost estimates are broke down by labor and material cost
  • Contractors are chosen and provided required documents


  • Borrower’s must select their own contractor and provide required documents.
  • A general contractor is not required, but the borrower is limited to three discreet trade persons.
  • A job that requires more than three will require a general contractor, which receives two draws.

Eligible Work Items, But Not Limited to:

  • Eliminating health and safety hazards
  • Repairing or replacing wells and/or septic systems
  • Connecting public water and sewage systems
  • Repairing/replacing plumbing, heating, AC and Electrical Systems
  • Making changes for improved functions and modernization
  • Eliminating obsolescence
  • Repairing and installing new roofing, provided the structural integrity of the structure will not be impacted by the scope of work being performed including: gutters, siding, and downspouts
  • Energy conservation improvements
  • Making more accessible for people with disabilities
  • Installing/repairing fences, walkways, and driveways
  • Installing new refrigerator, oven, cook top, dishwasher, built in microwave oven and washer and dryer
  • Repairing and removing in ground swimming pools
  • Installing new smoke detectors
  • Covering lead-based paint stabilization costs

FHA Standard 203(k)

  • The down payment for a FHA 203k is 3.5% and the minimum credit score is 640.
  • The loan limit is up to the FHA county limit and the minimum repair amount is $5,000.


  • The appraisal is “subject to repairs and improvements” or “per plans and spec” that will determine the after improved work.
  • The appraisal will be ordered once the HUD consultant has been provided a detailed work write up and cost estimate.

Eligible Work Items, But Not Limited to:

  • Converting a one family structure up to four.
  • Decreasing an existing multi-unit structure in one to four family structure.
  • Reconstructing a structure that has been or will be demolished, provided the complete existing foundation is not affected and will still be used.
  • Repairing/reconstructing or elevating an existing foundation where the structure will not be demolished.
  • Purchasing an existing a structure to another site, moving onto a new foundation and repairing/renovating it
  • Making structural alterations such a repair or replace structural damage, additions to structures and finished attics and or basements
  • Fixing, improving, or constructing a garage.
  • Eliminating health and safety hazards
  • Installing/repairing septics and wells
  • Connecting public water and sewage systems
  • Repairing/replacing, heating, AC, plumbing, and electrical systems.
  • Improving functions and modernization
  • Changing aesthetic appeal
  • Repairing or adding roofing, gutters and downspouts
  • Making energy improvements
  • Improving accessibility for people with disabilities
  • Installing and repairing fences, driveways, and walkways
  • Installing a cook top, refrigerator, built in microwave, dishwasher, and washer and dryer
  • Repairing/removing a in ground swimming pool
  • Installing smoke detectors
  • Making site improvements
  • Landscaping
  • Installing or repairing exterior decks, patios, and porches
  • Constructing a windstorm shelter
  • Covering led-based paint stabilization costs


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