Text or call 916-529-3948 to request a 203K consultation.

What is the FHA 203k program? 

This is a program through the FHA that enables a home buyer to purchase a house that is in need of big repairs or even an older home. They do this by financing the repairs as well as the mortgage into one loan. If the owner can’t occupy the property while the repairs are being made, there is an option of getting up to 6 months of mortgage payments so you can make payments and live elsewhere while the repairs are being made. They also include a 10%-20% contingency fund, determined by the 203K Consultant, which will create a cushion so you can ensure completion of remodel.

What kind of repairs does it include? 

Streamlined 203K is for nonstructural repairs. Things such as painting, new appliances, nothing major. Regular 203K would be more for structural and major repairs. Updating electrical or needing a new roof.

There are other repairs that can be made through the FHA 203K such as room remodels, floors, siding, HVAC, reconditioning or replacing plumbing, updating electric, making energy improvements, eliminating safety/health concerns, etc. This program doesn’t cover what they determine to be luxury items such as a pool.


How much can the loans be approved for? 

According to the FHA, for the regular 203K the amount of money you can be approved for is the lesser of the two: (1) the value of the property before rehabilitation plus the cost of rehabilitation, or (2) 110 percent of the appraised value of the property after rehabilitation, whichever is less.

Which type of 203K you go with, streamlined or regular, also determines the amount you can get. With a streamlined the loan can have up to $35,000 in addition to the purchase price of the home.

To determine your eligibility, contact a 203K lender and get pre-qualified.


FHA 203K FAQs 

1. Contact a 203k Lender and get pre-qualified. We can assist you in finding a lender in your area that we’ve worked with to insure that you’ll get the best service.

2. Hire a real estate professional to assist in finding a suitable property. Always choose one that understands 203k. (If you’re refinancing an existing loan with a 203k, a real estate professional is not needed.)

3. Set an appointment with us as your 203k Consultant. As your consultant, I will meet you at your site and review copies of the contracts and agreements required for the 203k loan given to you by your lender that you will need to sign prior to the close of the loan. After our meeting and the HUD/FHA Home Inspection that I will provide, I will create a “Job Specification & Bid Request”, which is a list of the FHA required repair items to be completed. I will also list inclusions you may want to add like new cabinets, flooring, windows, etc. I will also forward copies of the various reports to your lender to assist you in the loan process.

4. Get contractor bids by using the “Job Specification & Bid Request” prepared by me as your consultant.

5. Choose a contractor. As your consultant, I can assist you in this process and verify contractor compliance to the specifications. The lender will hire an appraiser and once the appraisal report is done, in most cases, your lender can close the loan.

6. Schedule the contractor to begin the work. Once the work begins, the contractor will require continuing inspections called “Draw Requests” to get progress payments for the work as it’s completed. As your consultant, I will inspect the project and prepare these documents and repeat the procedure until the project is complete.

*Although the “Streamline” program does not require a Consultant by FHA Standards, if the work to be done is valued over $15,000 and under $35,000, it would be recommended that you use the Consultant to prepare the “Job Specification & Bid Request” and to act as a “Plan Reviewer” to verify compliance with the specifications and to perform a “Final Draw Inspection”.


FHA Minimum Property Condition Screening Checklist 

This is a checklist that doesn’t guarantee compliance with FHA minimum property conditions and is only for reference. Download it here.

For more information 

Check out the FHA’s website on the 203k program.

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