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When should you consider getting a 203k loan

When should you consider getting a 203k loan

The 203k loan has been around for a while, it is just until recently that is has gained some exposure.  Many are looking to either buy an older home that has great “bones” but needs some updating and work, or those who have a great home but need more space and would rather keep the home they have then to sell and buy a new one.  A 203k is a great loan option for both those situations. Below is a list of some improvements and/or renovations that you might want to consider a 203k loan. 

  1. Home improvements-as little as new carpet & paint to larger tasks such as refinish basement, remodel a kitchen, bathrooms, including upgrade to appliances and fixtures
  2. Energy efficiency upgrades
  3. Structural repair
  4. Additions to home
  5. New siding, roof & windows
  6. Air conditioning/HVAC

Again, these are just some of the them, there are definitely a few other situations or needs you may have that can be done with a 203k.  First off, there are two types of 203k loans, the full (aka, the standard) and the streamline.  The difference in the two is the amount of repairs needed as well as if there is structural work needing to being done.  The streamline is for $35,000 and under of repairs (including fees & contingencies).  The standard is for $35,000 and above.  The other key factor for the standard is “structural”, if any structural work is needed then it will automatically be a standard 203k, no matter what the amount of repair.  Also you can only do landscaping work with a standard, not a streamline.

Whether you are needing the full or the streamline, they both require a significant amount of involvement.  The 203k sounds very appealing and a viable option for those who don’t have the funds to put into their home for such upgrades and/or repairs BUT the 203k may not be for everyone.

You need to be able to take the time to find a GC and/or contractors to get the work done, communicate and be involved with the work on the home.  It will take time, patience, and organization.  Not everyone is cut out to be a “Foreman” so to speak and control the operations.  Although it does help to hire a great GC and/or contractor that you trust and feel comfortable, one that is on the same page as you.  Make sure to put all the plans out on the table and discuss any questions and concerns upfront. 

If you have questions or would like to know more about the FHA 203k, please contact us.  We do specialize and have experiences with both the full and the streamline 203k.  If you would like to see if you qualify for the 203k please complete our secure online loan application.


Ray Williams

Branch Manager-Mortgage Maestro Group at Summit Mortgage Corporation


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