We have been having great success with the recent 203K clients. Our most recent experience was a client who bought a home for $107,000 and added $18,000 of cosmetic improvements to their home loan with the 203K loan used when they bought the house.
As a result they ended up borrowing $125,000 in total. However, the house appraised for $145,000 subject to those improvements being completed.
Not only did they add the finishing touches they wanted, they were able to finance it through the home, and make it tax deductible interest. They also are now in a position where even if the market stayed flat or declined a little they will have equity and not be upside down on their home down the road.