What is a 203(k) Loan and How Can It Help You?

Real Estate Agent with RE/MAX Results

For some reason, I’ve been attracting a lot of buyers interested in finding a rehab property lately. Perhaps it’s because there are so many foreclosures on the market now, it’s the prevalent type of property to grab at a good price. I’m surprised, though, at the number of people who aren’t familiar with the 203(k) Rehabilitation Mortgage program, available through the U.S. Department of Housing and Urban Development (HUD).

Here are just a few details on the program:

  • 203(k) mortgages can be used for both single family purchases as well as condos. However, there are certain restrictions regarding the condo loans, including the requirement that it be owner-occupied or be a non-profit owner.
  • The loans are available for buildings with up to 4 units.
  • Mixed-use buildings are eligible, but the mortgage can only be used for rehab to the residential portion of the building.
  • Can an investor get a 203(k) Mortgage? No.
  • Can a first-time homebuyer get a 203(k) Mortgage? Absolutely!
  • Can a 203(k) Mortgage be used to convert a single family or two-family into two or more units? Yes – but it can not exceed the maximum of 4 units.
  • Is there a minimum loan amount? Yes – $5,000 is the minimum loan amount you can get.
  • What is the time frame for construction requirements? Work must begin within 30 days of the signing of the Agreement and must not continue more than 6 months beyond the first date of construction.

These are just some of the highlights of the 203(k) Mortgage Rehab program. For more information, visit the HUD’s web site and their detailed Q & A section on the program. As always, my web site at CyberGreenRealty.com has more information on energy efficient improvements and other programs that may help qualify you for a higher mortgage.

Until next time, Peace!



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  1. Christine McInerney 07/09/2009 01:28 PM
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Christine McInerney
Great Life RE - Knoxville, TN
The McInerney Team, Knoxville TN Homes For Sale

Good post, I attract a lot of these clients as well.  THe 203K loans are great- I have yet to close one though as all my clients want to be able to do the work themselves instead of hiring out a licensed contractor.

Jul 09, 2009 01:29 PM #1
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