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FHA 203k Rehab Mortgage CT

Mortgage and Lending with Residential Mortgage Services NMLS 70526

So you finally find the home of your dreams and are ready to make an offer...well, almost. It's in a great neighborhood, has a good school system, and a yard big and safe enough for your kids to play. It's just in need of one thing, upgrades! When you walk into the home you think you stepped right into a 1977 JCPenney Catalog. Dull and let's get some sunlight in here! Unless you like olive-green toilets and wood paneling?  Don't think this stuff is ever making a come back...kind of like Tiger Woods, oops. 

Anyway, how does a FHA 203k loan work?  Here's an example:

Purchase price $300,000

Rehab costs  $30,000

Total $330,000

A borrower's down payment is figured on the total amount of $330,000.  So, if a borrower was putting the minimum down payment required of 3.5%, their down payment would be $11,550. 

Purchase and Sales contracts are written-up just like a normal FHA contract.  Sale price $300,000 with the respective down payment.  Repairs are left out of the contract and are only for loan purposes.  These loans do not take any longer to close than a normal FHA loan IF the mortgage loan officer knows what he/she is doing. 

The biggest delay I find is getting the write-up of repairs and information from the general contractor.  So, I tell my borrowers, let's choose a general contractor and get the write-up of repairs immediately.  The write-up must be signed and dated by all borrowers and the general contractor.  It should also be on company letterhead and include the general contractors license number.  General contractors must also be licensed and insured and we will need a copy of their general liability insurance.

Below is a list of acceptable repairs/upgrades (home additions are not acceptable):

o Repair/replacement of roofs, gutters & downspouts

o Repair/replacement/upgrade of existing heating, ventilation & air conditioning

o Repair/replacement of plumbing & electrical systems

o Repair/replacement of flooring

o Minor remodeling that does not involve structural repairs. Upgrade kitchen and baths

o Weatherization, including storm windows & doors, insulation and weather stripping

o Purchase & installation of appliances, including free-standing.

o Improvements for accessibility for persons with disabilities.

o Lead-based paint stabilization or abatement of lead-based paint hazards

o Repair/replacement/addition of exterior decks, patios & porches.

o Basement finishing & remodeling that does not involve structural repairs

o Basement waterproofing

o Replacement of windows, doors, and exterior wall re-siding.

o Well/septic repair

Please note that FHA 203K rates are about .375% to .5% higher than FHA rates.  Funds for repairs are distributed to the borrower's bank account after the closing; typically in 2 draws.  Appraiser must verify that repairs were completed. 


I can help you!


Robert Graybill


Sr. Mortgage Consultant

Stearns Lending, Inc.


57 Plains Road Suite 3C 
Milford, CT  06461 


Phone: 203.530.2674

Fax: 1.203.774.1044

EMail: rgraybill@stearns.com

FHA 203K Rehab Mortgage CT

Comments (6)

Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

I really love the concept behind the 203k loan...my issue has been some of the individual banks have put additional conditions on...above what the appraiser required (example...appraiser says shingles need to be replaced in a specific area...takes a picture with his appraisal and gives specifics...bank requires entire roof to be replaced).

Mar 29, 2011 05:15 AM
Monika Phillips
Keller Williams Realty Palm Beaches - Palm Beach Gardens, FL

To be honest I didn't know what exactly is 203 k loan but after reading your helpful article I have a better picture about it!

Very good post!

Mar 29, 2011 05:41 AM
Robert Graybill
Residential Mortgage Services - Fairfield, CT
Experience and Knowledge

Thank you for your comments.  I'm glad it was helpful!

Mar 29, 2011 12:26 PM
Tracy Lynn
Milford, CT

Great blog! Very informative

Mar 31, 2011 08:08 AM
Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

What a fabulous post, for your second!   Great information, and well laid out...  Welcome, Robert!

Apr 01, 2011 04:57 PM
Olympus Executive Realty Inc.
Olympus Executive Realty INC. - Orlando, FL
Home Of The Top Producers


I see your coming right along on ActiveRain, once you get the hang of a few blogs they all come naturally.

Well, best of luck to your new future with the RAIN, 

Apr 03, 2011 04:44 PM