FHA 203k
- An FHA 203k mortgage is a type of FHA loan that allows borrowers to finance both the purchase or refinance of a home and the cost of its renovation or repairs.
- lower down payment requirements than conventional loans, with a minimum down payment of 3.5% of the purchase price.
- flexible credit requirements, making them accessible to borrowers with less-than-perfect credit.
- fixed or adjustable interest rates, and terms typically range from 15 to 30 years.
- require that the renovation or repairs be completed by a licensed contractor and that the work be inspected and approved by an FHA-approved consultant.
- two loan types: the Standard 203k, which is used for major renovations and structural repairs, and the Streamlined 203k, which is used for smaller renovations and repairs.
- maximum loan amount based on the property’s value after renovation, which may be higher than the standard FHA loan limit.
- can be used to finance a primary residence, a second home, or an investment property.
- FHA 203k loans offer a way for borrowers to purchase a home in need of repair or renovation and finance the cost of those improvements into their mortgage.
Requirements
Down Payment: 3.5% of the final loan amount
Terms 30 years, fixed
Credit Score: 620 minimum
Mortgage Insurance: Yes
Maximum Loan Limit: Yes, varies by county
