FHA 203K Mortgage

A Home Repair Loan And Mortgage All In One

Current requirements are that you only have to come up with 3.5% of the home’s purchase price plus repair costs to buy a house with this type of loan. So if you were buying a house whose asking price was $150,000 and that needed repairs of $15,000, you would need 3.5% of $165,000, or $5,775, as your down payment. Of course, you’ll also have to meet the usual borrower requirements for an FHA loan, like having a steady, verifiable income and a good credit score.

Eligible Properties

FHA 203(k) loans are intended for owner-occupants, not investors. The following types of properties are eligible:

  • Single-family to four-family dwellings
  • Existing construction that has been completed for at least one yea
  • Tear downs, as long as part of the existing foundation will remain
  • Moving an existing house to a new foundation
  • Rehabbing the residential portion of a mixed-used (commercial/residential) property
  • FHA-approved condos


Regardless of what work you may think the house needs, the lender and FHA have their own requirements that you’ll also have to meet. The U.S. Department of Housing and Urban Development (HUD) “requires that properties financed under this program meet certain basic energy efficiency and structural standards” to “comply with HUD’s Minimum Property Standards (24 CFR 200.926d and/or HUD Handbook 4905.1) and all local codes and ordinances.”

The energy efficiency standards include caulking, insulation and ventilation as well as using the correct size heating and air conditioning systems for the home. The home is also required to have smoke detectors adjacent to each sleeping area.

You might be surprised by the variety of home repairs and improvements that can be financed with the 203(k) loan. These include, but are not limited to:

  • Painting
  • Room additions
  • Decks
  • Patios
  • Site grading and drainage
  • Bathroom remodeling
  • Kitchen remodeling, including appliances
  • Finishing an attic or basement
  • Flooring
  • Energy conservation
  • New siding
  • Elimination of lead-based paint problems
  • Heating, ventilation and air conditioning systems (HVAC)
  • Plumbing
  • Roofing


The FHA does not allow “luxury items” such as tennis courts, swimming pools, hot tubs and barbecue pits to be financed with a 203(k) loan. Call Jody at (702) 769-1791 to find out more about specific improvements you want to make to see what you can finance.