Buy it and fix it with one loan.
FHA 203(k) combines your purchase and renovation costs into a single mortgage. One loan, one closing, one monthly payment.
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NMLS #2620605
Equal Housing Lender
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Get pre-qualified without a hard inquiry
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Homes needing repair or updates
Renovation costs rolled into mortgage
Is this loan right for you?
An FHA 203(k) loan combines a home purchase or refinance with renovation financing into a single loan. Instead of taking out a separate construction loan or home equity line to fund repairs, you finance the home and the improvements together at closing. This makes it possible to buy a home that needs work and fund the renovation without a second loan or a large cash reserve.
- Direct access to your officer
- Homes needing repair or updates
- Renovation costs rolled into mortgage
- Refinance plus improvements in one loan
- Credit score 580 or higher
- Primary residence only
- One closing covers purchase and rehab
Key benefits.
Down payment as low as 3.5% based on the after-improved value of the home
Works for purchase or refinance with renovation costs included
Eligible repairs include structural, cosmetic, roofing, HVAC, plumbing, and more
Allows you to buy homes that would not qualify for standard financing in their current condition
Tradeoffs to understand.
- More complex process than a standard FHA loan, requires a HUD-approved consultant for standard 203(k) loans
- Contractor must be approved and work must be completed within the required timeframe
- Mortgage insurance required for the life of the loan in most cases, same as standard FHA
- Limited 203(k) version available for smaller projects under $35,000 with fewer requirements
- Primary residence only, cannot be used for investment properties
Compare your options.
| Feature | FHA 203(k) | Standard FHA |
|---|---|---|
| Purpose | Purchase or refi plus renovation | Purchase or refi only |
| Down payment | As low as 3.5% | As low as 3.5% |
| Loan basis | After-improved value | Purchase price or appraised value |
| Renovation funds | Included in mortgage | Not included |
| Complexity | Higher, requires consultant | Standard |
| Property condition | Homes needing work qualify | Must meet FHA standards as-is |
| Best for | Fixer-upper buyers | Move-in ready buyers |
Purpose
- FHA 203(k)
- Purchase or refi plus renovation
- Standard FHA
- Purchase or refi only
Down payment
- FHA 203(k)
- As low as 3.5%
- Standard FHA
- As low as 3.5%
Loan basis
- FHA 203(k)
- After-improved value
- Standard FHA
- Purchase price or appraised value
Renovation funds
- FHA 203(k)
- Included in mortgage
- Standard FHA
- Not included
Complexity
- FHA 203(k)
- Higher, requires consultant
- Standard FHA
- Standard
Property condition
- FHA 203(k)
- Homes needing work qualify
- Standard FHA
- Must meet FHA standards as-is
Best for
- FHA 203(k)
- Fixer-upper buyers
- Standard FHA
- Move-in ready buyers
What happens next
Identify a contractor before applying. Lenders need a scope of work and cost estimate to process the loan.
After closing, renovation funds are held in escrow and released in draws as work is completed.
Once renovation is complete and equity builds, a conventional refinance can eliminate FHA mortgage insurance.
If rates drop after closing, FHA Streamline Refinance may be available to lower your rate with minimal paperwork.
Keep exploring
Explore related paths
All home loan options
Compare purchase programs and find the path that fits your situation.
Browse home loans →Loan type questions
Plain answers on how conventional, FHA, VA, and other programs compare.
Browse loan FAQ →Common questions, plain answers.
Most permanent improvements qualify including structural repairs, roofing, HVAC, plumbing, electrical, flooring, kitchen and bath updates, and energy efficiency improvements. Luxury additions like pools do not qualify.
Questions about rates or payment?
Found a home that needs work? See how 203(k) financing can help.
No credit pull to get started. We compare your options and explain the tradeoffs.
5.0 Google Rating
Verified borrower feedback on Google
NMLS #2620605
Equal Housing Lender
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