Buying or refinancing a home but worried about the cost of repairs or upgrades? The FHA 203k Home Renovation Loan Program can help. This program lets you purchase (or refinance) a property and finance the renovation costs in the same loan. From repairs and updates to adding an addition, the 203k loan makes it possible to turn a fixer-upper into your dream home without needing separate financing.
This program applies to 1–4 unit owner-occupied properties and can even include buildings with some commercial space, as long as it’s less than 51% of the total property.
How to Get Started with a 203k Loan
Find the Right Property
Choose a home that fits your needs and has renovation potential. Both the location and the possible improvements will affect your loan amount.
Secure Loan Approval
Work with a lender experienced in FHA 203k loans. They’ll review your finances and credit, then determine the loan amount you qualify for.
Hire a 203k Consultant
A HUD-approved consultant will inspect the property, ensure it meets Minimum Property Standards, and create a feasibility report with the required repairs and upgrades.
Get Contractor Bids
Using the consultant’s report, obtain bids from licensed contractors who are qualified for your project. Their estimates will outline costs and timelines for the work.
Property Appraisal
The lender will order an appraisal that includes the home’s after-renovation value. This ensures your loan aligns with the property’s improved worth.
Choose Your Contractor
Review your bids and select the contractor that best matches your needs. Make sure you have a clear written agreement covering scope, timeline, and payment terms.
Loan Closes
All legal and financial documents are signed to finalize the loan and officially transfer ownership of the property to you.
Renovations Begin!
The process of improving, updating, or restoring your home’s interior or exterior has begun.
Draw Inspection
When your contractor is ready for a Draw Inspection, we will meet you and your contractor on site and inspect the work that has been completed and write up the Draw Request. This may occur several times depending on your loan.
