What is a FHA 203k Home Loan?

FHA 203k Home Renovation Loans

Home concept

Ever get inspired by these HGTV renovation shows that show before and after transformations of homes? Ever think, “I’d love to do that when I buy a home but dont have the extra cash?” There are loan programs that do not require you to put 20% down. Programs that can get big or even small jobs done in your new dream home. There is some extra work required but it can benefit you greatly.
The first loan program I am talking about it an FHA 203k loan. Most people have heard of FHA loans that require you only to put 3.5% down. FHA 203k loan is a construction loan designed to help borrowers finance a home that needs repairs or things you just want to update before you move in. ()

Info to know about the FHA 203k loan:

  • This type of loan is for Owner Occupied Properties Only. Meaning, you must move in as your primary residence once the renovation is complete
  • Normal FHA rules are required such as credit scores, loan limits etc.
  • FHA Loan limits apply :
    • Single Family Home – $275,665.00
    • Two Family – $352,950.00
    • Three Family – $426,625.00
    • Four Family – $530,150.00
  • 3.5% minimum down payment requirement based on total cost of project
  • A Minimum of $5000 in eligible repairs required
  • A contractor that is a FHA 203k approved contractor is required
  • Repairs must begin within 30 days of closing and completed in 6 months.
 
I have obtained most of this information from a local NOLA Loan Officer – Darla McNamara with America’s Mortgage Resource. Check out a list of some of AMR’s approved contractors. These contractors are familar with the FHA 203k loan process including submission of bids and insurance requirements – 
 
For a list of types of renovation that can be done with a FHA 203k loan – click here.
Please note: I am not a license loan officer. For more detailed information, please contact your loan officer for approval or reach out to me for a list of several loan officers that are experienced with the FHA 203k loan program and can work on getting you approved. This information is to serve as an introductory to the program. For specific questions, contact me and I can help you get the answers you need. robyn@thenolagal.com