Home > Loan Programs > 203K Property Rehabilitation Loan
203K Property Rehabilitation Loan
Buy and renovate with a single loan — transform any property.
Overview
The FHA 203(k) loan combines a home purchase (or refinance) with renovation financing into a single mortgage. Instead of needing separate construction loans and bridge financing, you close once and fund both the purchase price and renovation costs together. It’s the ideal solution for buying a fixer-upper or renovating your current home.
Key Benefits
- ◎ Finance purchase and renovation in one loan
- ◎ As little as 3.5% down payment
- ◎ Eligible for properties needing significant repairs
- ◎ Covers structural repairs, remodeling, and upgrades
- ◎ Use for purchases or refinances
- ◎ Standard and Limited (Streamline) versions available
Standard vs. Limited 203(k)
The Standard 203(k) is for major renovations — structural work, additions, or projects over $35,000. It requires a HUD-approved consultant to manage the process. The Limited 203(k) (also called Streamline) covers non-structural improvements up to $35,000 and has a simpler process. Both require FHA-approved contractors.
What Can Be Financed?
203(k) loans cover a wide range of improvements: roofing, plumbing, electrical, HVAC, flooring, kitchens and baths, accessibility modifications, energy efficiency upgrades, and more. Luxury items like pools and outdoor kitchens are not eligible. The home must be your primary residence.
The 203(k) Process
After pre-approval, you identify a property and get contractor bids. A HUD consultant (for Standard) reviews the scope of work. You close on the loan and renovations begin — typically within 30 days of closing. Funds are held in escrow and disbursed to contractors as work is completed. Most renovations must be finished within 6 months.
Frequently Asked Questions
Common questions about 203K property rehabilitation loans
Can I use a 203(k) loan for an investment property?
No. The FHA 203(k) loan is only available for owner-occupied properties — meaning you must live in the home as your primary residence. It cannot be used for pure investment properties or vacation homes.
How much can I borrow for renovations?
The total loan amount (purchase price plus renovations) cannot exceed the FHA loan limit for your area. The renovation portion is based on the lesser of the actual cost of improvements or the value added to the property.
Do I need to use a specific contractor?
Yes. All contractors must be licensed, insured, and approved by the lender. For Standard 203(k) loans, a HUD-approved consultant oversees the renovation process and inspects completed work before funds are released.
Ready to Get Started?
Apply in minutes — no obligation, no credit impact.