How do you finance home renovations? The FHA 203K loan is one way that eligible borrowers can finance repairs, renovations or upgrades on a home they are buying or refinancing.
The FHA 203K loan gives borrowers the chance to purchase and renovate a home all in one loan transaction; that means one interest rate and one payment, all under FHA financing requirements. Some of the most popular renovations financed with a 203K loan include upgrades to:
There are two 203K loan options available to eligible FHA borrowers: the limited 203K loan and the 203K standard loan.
Limited FHA 203K Loan
The limited 203K loan (sometimes called a “streamline 203K”) finances non-structural renovations and repairs up to $35,000. It is designed primarily for cosmetic upgrades and limited repairs. Free-standing appliances may also be financed. There is no requirement to work with a HUD consultant with the limited 203K loan, and no minimum project cost is required.
FHA 203K Standard Loan
The FHA 203K standard loan (also known as a “full 203K”) can finance upgrades and renovations totaling more than $35,000. With a full 203K, the minimum amount that may be financed is $5,000. And while the full 203K loan has no limit, the total amount must remain within the county’s FHA loan limits.
The 203K standard loan is designed for projects that require a higher level of supervision from estimates through completion; therefore, structural repairs and renovations required to make the home “habitable” are permitted with this option.
FHA 203K Loan FAQs
Q: Can you refinance your home with a 203K loan?
A: Yes. Eligible homeowners can apply for a 203K refinance loan to finance repairs and upgrades.
Q: Can the loan be used for landscaping?
A: No. Neither 203K option may be used for outdoor landscaping; however, homeowners should ask their loan officer about other cash-out refinance options that may suit this purpose.
Q: Can the loan be used to put in a swimming pool?
A: No. Neither 203K option may be used for swimming pool construction; however, homeowners should ask about other cash-out refinance options that may suit this purpose.
Q: Can a 203K home finance a home being “sold as-is”?
A: Yes. Both 203K options are designed to finance renovations on “as-is” homes.
Q: Can flippers finance investment properties with a 203K loan?
A: No. Both 203K loan options are designed to finance owner-occupied homes only; however, we encourage you to ask your loan officer about other loan products for financing investment properties.
Q: When can the work begin?
A: The renovation, repairs and upgrades can begin after the loan closes.
Q: Where can I find a HUD 203K Consultant?
A: Your WCC loan officer will help you locate a HUD 203K Consultant near you and provide guidance on the entire loan process.
Learn More about FHA 203K
To learn more about the FHA 203K loan, contact Wholesale Capital Corporation and request to speak with a loan officer. We will be glad to answer your questions.
Wholesale Capital Corporation is not affiliated with or acting on behalf of or at the direction of the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) or any government agency/government-sponsored entity. WCC is licensed by the California Bureau of Real Estate, Broker License #01147747 and CA Finance Lender’s License #603K610, NMLS# 9873. Also licensed in Arizona by the Arizona Department of Financial Institutions, MB #0937346.