FHA 203(k) Renovation Loan

An important tool for community and neighborhood revitalization, the FHA 203(k) loan offers flexible qualifying and low down payments:

FHA down payment (3%)
Flexible credit qualifying
Assumable loans
Finance up to 6 months of mortgage payments
Purchase or Refinance and Improve all in one loan
Up front mortgage insurance waived

203(k) Repair

The 203(k) loan program offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

Made available to certain lenders by the U.S. Department of Housing and Urban Development (HUD), the FHA 203(k) program has already provided many buyers with the funds necessary to buy their first home, or greatly improve a move-up home. The FHA 203(k) loan is available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units.

203(k) Renovation

Renovation loans such as the FHA 203k program are used to make improvements to an existing property. They can be used to make simple up-grades to a home, such as a kitchen or bath improvement, or to completely reconstruct a home that is presently un habitable. They can also be used to tear down an existing structure and rebuild a new one using some portion of the existing foundation, or to move a building you purchase or own onto land that you purchase or own.

They are generally used when the value of the home as it exists today is insufficient to support the financing needed to renovate the home.

203(k) Example

For example, let’s assume that you are purchasing a home for $150,000 and wish to invest an additional $50,000 to renovate it. Traditional loan programs will lend you the funds to purchase the home but will not advance additional funds to renovate it. Renovation programs will finance both the purchase and renovation of a property.

Or, let’s assume that you own a home presently worth $150,000 , you have a $150,000 mortgage loan on it, and that you wish to invest $50,000 in improvements. You can’t obtain a traditional home equity loan because you do not have any equity. However, innovation programs can finance such improvements, provided that the value of the home after the improvements are made supports the loan. Apply with Allie Mae to be matched with a lender that is right for your situation.


    Fannie Mae
    Freddie Mac
Ginnie Mae


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