FHA Renovation loans are available in two different formats, streamline and consultant. The consultant loan allows for more extensive repairs. The streamline program caps the repairs at $35,000. 
The advantage of the FHA renovation loan, is that the underwriting criteria including credit, down payment, income and reserves are the same for the standard FHA 203(b) loan. Please remember that in order to use the FHA program, the borrower must intend to occupy the home as their primary residence.
Here is the list of eligible and ineligible repairs for the Consultant Loans:
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Eligible Repairs |
Not Eligible |
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Structural alterations and additions |
New tennis court |
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Garage (attached / detached/ new) |
Gazebo or bathhouse |
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Remodel kitchen or bathroom |
Additions or alterations to provide for commercial use |
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Install appliances |
Photo mural |
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Changes to eliminate deterioration and reduce maintenance |
Television antenna or satellite dish |
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Repair swimming pool (up to $1,500) |
New swimming pool |
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Modernize plumbing/heating/air conditioning/ electrical systems |
Outdoor fireplace/ hearth/barbeque pit |
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Install or repair well/septic system |
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Install or repair roofing/ gutters/ downspout |
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Install flooring/ tile/ carpet |
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Energy conservation improvements |
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Major Landscaping/ decks/ fencing |
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Improvements for accessibility (e.g., handicapped ramp) |
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Interior and exterior painting |
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Improvements that are a permanent part of the real estate |
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For the more popular FHA 203K Streamline Renovation Loan the repair list is as follows:
Eligible |
I
Not Eligible |
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Repair/replacement roof, gutters and downspouts |
Major rehabilitation or major remodeling, such as relocation or a load-bearing wall |
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Repair/replacement/upgrade of existing HVAC systems |
New construction, including room addition |
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Repair/replacement/upgrade of plumbing and electrical systems |
Repairs of structural damage |
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Repair/replacement of existing floors |
Repairs requiring detailed drawings or architectural exhibits |
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Minor remodeling, such as in the kitchen, which does not involve structural repairs |
Any rehabilitation activities that require more than two payments per specialized contractor |
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Exterior and interior painting- including Lead-Based Paint Stabilization |
Landscaping or similar site amenity improvements |
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Weatherization: including storm windows and doors, insulation, weather stripping, etc |
Work that would cause the borrower to be displaced from the property for more than 30 day during the time of rehabilitation |
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Repair/replacement/upgrade of appliances (may include free-standing ranges, refrigerators, washer/dryers, dishwashers and microwaves) |
Work items that would necessitate a consultant to develop a Work Write-Up |
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Improvements for accessibility for persons with disabilities |
Any repair or improvement requiring a work schedule longer than six months |
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Basement finishing/remodeling/waterproofing (not requiring structural repairs) |
Luxury items: Tennis court; Gazebo or bathhouse; Photo mural; Television antenna or satellite dish; Outdoor fireplace/hearth/barbecue pit |
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Repair/Replace/Add decks, patios & porches |
Additions or alterations to provide for commercial use |
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Window & Door replacement& Exterior wall re-siding |
New swimming pool |
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Septic and/or Well repair or replacement |
Using an FHA renovation loan can turn a house into a dream home.
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