FHA 203K Streamline Renovation/Purchase

Real Estate Technology with Content, coding, marketing, host.

So you or your client have found a home in a great area in the client's price range. Only one problem: it's in bad shape. The HVAC system is 50 years old, the roof is 40 years old and the windows may as well not even be closed. Plus the kitchen has vinyl floors in 3 different patterns and the counters are all laminate with burns and holes and scars.

Not to fear! Meet the FHA 203K Streamlined renovation loan.

Eligible Improvements Virtually any kind of improvement is eligible provided it becomes a permanent part of the real property and adds value. 


  • Additions to the structure
  • Kitchen or bath remodels
  • Finished basement or attic
  • Patios, decks or terraces
  • Roofing and landscaping
  • Safety, energy efficiency and electrical upgrades
  • Handicapped accessibility improvements


Luxuryitems are not eligible


  • Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, saunas or alterations to support commercial use
The maximum loan amount must be within the FHA loan amount maximum for the MSA where the home is located and must include the purchase price and the renovation amount. The maximum renovation amount is $35,000 and the minimum is $5,000. Under $5,000 we can do with an escrow of repair funds. A minimum of 10% contingency reserve is required and must also fit into the FHA loan maximums for the area where the property is located. (Any balance remaining on the contingency will be applied to the principal balance and may not be used for additional repairs.)

FHA 203K Streamlined Rehab/Renovation Loan

Yes, it takes a little longer to close an FHA203k Streamline loan than it does to close a standard FHA loan. If you are an agent and you are concerned about that extra couple of weeks just think of it this way: You may make a sale you would not have otherwise made. You may help a buyer get into a home in the area where they wanted to live instead of where they "had" to live. You can be a real hero for someone.

If you are in Georgia I can help you with the necessary paperwork and give you a short class in how to use the FHA 203K Streamline Rehab loan to purchase, sell or represent homes in today's economy. Never hesitate to call me at any time and I'll be happy to answer your questions.


Posted by

Web/Social Developer For Hire - I code. I create. I manage. Whether you need your website to actually do something other than look pretty or one of the following services let's talk. Anyone can make a beautiful WordPress site (all the hard work is done) but few can make it work for you. , blog content, research intense reports, data reports (and accompanying charts and graphics), ebooks, presentation content, speeches, social media management, advertising scripts, or similar, let me show you what you can have.

Listen to Social Media Edge Radio weekly for powerful tips on making the Internet pay for you. Blogging, social media, and web technology with some of the most successful and well-known guests on the Web!

I started writing on Active Rain in 2006 when I was representing the mortgage industry. I am no longer in that industry and many of the older posts contain outdated information. Please do not contact me for LENDING or MORTGAGE questions but rather contact a licensed mortgage professional from your area. I have always been in marketing and branding and that is still what I do. Thanks for reading!

Comments (31)

David Hunter
Century 21 Wright Pace Real Estate - Jonesboro, AR
Century 21 Wright Pace Real Estate

I've heard about this loan.....but it's not used much in my area. From what I've heard it's hard in our area to find lenders that want to use it. I'm definately going to check with a couple of the area lenders and see if they would be willing give me some information on it.

Thanks for your blog.....maybe it's opened up a avenue for some of our troublesome listings.

Nov 19, 2009 10:19 AM
John Occhi
AZ Veteran Notary Services - Marana, AZ
Mobile Notary Public/Certified Loan Signing Agent


Thanks for this useful information - you do a great job of breaking it down and simplifying the overview of the program.  I have resisted these in the past because of the time and the uncertainty.

I'm going to go ahead and reblog this for my readers...


Nov 19, 2009 10:37 AM
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)
Ken - Thanks for providing more details about this program. I have heard about it since I got my license, but I haven't. Ever closed one of them.
Nov 19, 2009 10:57 AM
Lorna Presswood
Elite Texas Properties - Galveston, TX

I've had experience with this type of loan "post hurricane ike" here in Galveston. They are very beneficial in certain circumstances. Great blog! and informative to those that haven't been exposed to it~

Nov 19, 2009 11:33 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Ken, consider this re-blogged again. Great explanation of this loan. Indeed it will sell homes that otherwise wouldn't sell. What about an older home that has been taken down to the framing? Would that qualify? We have such a listing. A lot of work has been done on it, but the HVAC and drywall and kitchen and bath fixtures, cabinets, haven't been put in. Sounds perfect for this loan.

Nov 19, 2009 11:56 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

PS Ken, do they charge a higher interest rate for this loan vs. a regular FHA loan?

Nov 19, 2009 11:58 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Ken - great informaiton. I had heard of these but was not sure of the details...now I am. I have the same question as Sharon above.


Nov 19, 2009 12:37 PM
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Thanks for reminding us what has to be done and that there are different options out there.

Nov 19, 2009 12:51 PM
Svetlana Stolyarova
Local-n-Global Realty, Cleveland and International Real Estate Solution - Mayfield Heights, OH
Local-n-Global Realty, Broker 216-548-4663

My experience with 203K deal was eventually very good. That was the only way to help this family with the affordable house in a desirable neighborhood. Waiting period was terribly long. Yes, it was Bank of America who secured the repair part of the loan. However, if your clients are prepared, patient and if they hire a decent contractor it's a perfect solution for many families!

It may be a problem if your clients buy a house in the city with point of sale inspections and escrow requirement. Not every city honors 203K purchases. They just want money in escrow right at closing.

Nov 19, 2009 01:20 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

I can't believe that Lenn beat me to the garage...  My head is spinning with the possibilities...

Nov 19, 2009 01:30 PM
Paul Francis
Francis Group Real Estate - Las Vegas, NV
Las Vegas Real Estate Agent - Summerlin Homes

This is a great loan with all of the beat up trashed bank owned homes out there.... Not only does it up the value of the home.. it also provides work for the local construction trades and that's real recovery.

The $8,000 tax credit should be mandated towards home improvements instead of who knows what... A little sweat equity makes a house a home.

Nov 19, 2009 01:35 PM
Jody Keating
Jody Keating Connective Realty,LLC, Bryan/College Station,TX - Bryan, TX
Broker/MM/Realtor, Bryan / College Station, TX


Great information. I recently signed up with Dennis Walsh and Associates to become a 203k specialist and residential construction certified. I've also recently written a post on FHA 203k loans, hopefully by learning more about it I can encourage more buyers to avail of it. it's a win win situation!


Nov 19, 2009 01:42 PM
Tim Bradford
Cleveland, OH
NMLS 250013

Ken,   Great post about the 203K program.  I would like to see more realtors using this program to sell Bank Owned or HUD properties to Owner Occupants instead of Investors who generally do a little work and then resell the property.  As Svetlana said "if your clients are prepared, patient and if they hire a decent contractor it's a perfect solution for many families!" Also dealing with a Lender that is familar with the program is a key part of the success.   In Northern Ohio we had about 90 lender that did 203K loans in the last year.  Most did very few of them, The company I work for does about  20% of all the 203K loans in Northern Ohio.  My advise is for clients to choose a lender that does and knows the 203K product not a lender that wants to start doing them. 

Nov 19, 2009 01:47 PM
Michael Eisenberg
eXp Realty - Bellingham, WA
Bellingham Real Estate Guy

A client who just got a contract are foreclosed property that is not complete. The lenders say that any government-backed loans will not work because the house is not habitable, the plumbing isn't finished no appliances, no floor coverings just wondering if this type of loan will work in this situation

Nov 19, 2009 03:09 PM
James Lyon
Vista Pacific Realty - Sacramento, CA

I have not had a deal accepted with a 203k. I have made several offers for clients with this type of loan but it seems that most sellers are looking for cash deals and we have missed a couple of nice properties this way. I would really like to close one with a 203k so that I have gone through the process with it.

Nov 19, 2009 04:29 PM
Charles Perkins
Charles G. Perkins, CPA - Burien, WA

I'm certainly going to check into this loan product.  I'm going to see if anyone is doing these in the Seattle area.

Nov 19, 2009 06:27 PM
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK


This took some time for you to cover this so well. I am appreciative of this post, it spells it out in easy to understand format that can be understood by anyone whether they are working with mortgages daily or a consumer that needs an FHA 203K.

Thank you.  Is it Ok if I re-blog for my clients also?


Nov 19, 2009 11:17 PM
Dawn Maloney
RE/MAX Trinity Northeast Ohio Real Estate Specialist - Hudson, OH
330-990-4236 Hudson & Northeastern Ohio

I am sooo grateful for this info. Not easy to locate!!

Nov 19, 2009 11:54 PM
Steve Mattison
Canyon de Chelly National Mo, AZ
Vietnam Veteran

I assume this can be used to buy REO's and short sales too?  Thanks for the great info, again, KEN!

Nov 20, 2009 06:43 AM
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

'Streamline version is a little limited' - just closed one and you better have mucho patience with the extra paperwork.  Good post Ken.

Nov 20, 2009 07:12 AM