FHA 203k Program

HUD’s Section 203(k) loan is one of many FHA programs that make mortgage credit available to borrowers when buying or refinancing a house that is need of repair or modernization. Unlike conventional rehab programs, the 203k has the same relaxed credit and income qualifying and low down payment guidelines as other FHA loan programs. This program works great for those who may not otherwise qualify for conventional loans due to income, credit and/or down payment limitations.

Similar to conventional renovation loans, the 203k offers a solution that helps borrowers by providing a single, long - term, fixed - or adjustable - rate loan that can cover both the acquisition and rehabilitation of a property. 203k loans save borrowers time and money.

FHA 203K Features

• Higher level of supervision of homeowner than other programs
• Loan amount based on Completed Value but capped at FHA maximum mortgage limits in your county. *adjusted annually currently at $271,050 for most counties
• Very Low 3.5% minimum down payment
• Relaxed Credit and Income qualifying guidelines (Must have a minimum 640 credit score)
• Some Limits on types of repairs
• Investors (non-owner occupied) prohibited
• Fixed or Adjustable rates (ARM’s) available
• Can be combined with FHA’s Officer Next Door and Teacher Next Door home ownership programs.
• Can finance up to six months of mortgage payments for owner-occupied properties to cover non-occupancy costs during construction. For example, if you have to spend six months renting an apartment while your home renovation takes place, you can roll those expenses into your loan amount.