Can foundation repairs be made with the FHA 203k program?

Home Inspector with, covering the USA S0289

This question was resontly asked by a clien tin Concord CA and is true there or anywhere else for that matter.


I can't believe that I had a client call me with a Freddie Mac foreclosure she was trying to purchase and she was told by the listing agent that the 203k wouldn't do the needed foundation repairs. In this case it sounds like it may need an entire foundation replacement. I find it so interesting that someone who knows nothing comes off like a professional who knows it all and speaks with authority that this repair cannot be made. Please send some time learning about the available products before you act as an authority on them. 

Sorry to tell you but that is repair is EXACTLY WHAT WE DO WITH THE 203K. It is designed for those major and structural repairs. YES, WE CAN REPLACE FOUNDATIONS OR REPAIR THEM. 

The guideline actually says "you can construct a home on an existing foundation if that is all that exists, or you can put a foundation under an existing house that may never have had one". Either way it can be done. We move houses from one site to another and in doing so "don't bring the foundation" we build a new foundation. 

The Full or Standard 203k is all about making major repairs and structural repairs, moving bearing walls or installing LVL beams to  span larger distances to open rooms up and create great rooms, etc. All is possible with the Standard 203k. 

If you are going to a lender who only does the Limited 203k they will sometimes tell you that "this house can't be a 203k" because they don't do the full and they want you to find a home where they can do the loan for you. NOT because the 203k can't do the repair, they don't want to loose a potential loan. Therefore it is easier to say "this home doesn't qualify because the repairs are too high. NOT TRUE and certainly not a service to the client. 

I always recommend using a lender like  who is a seasoned professional and is able to use the Limited 203k or and more imporantly the Full or Standard 203k. That way he can guide you to the correct program that fits your particular need and not guide you away from your selected home just because it needs a higher construction amount. Ed and I are doing several right now that the construction is over $200,000 and in some cases we have seen them over $400,000 in construction costs. We had one recently that was over $600,000 in construction costs.

We are working on one in Alamo CA with a construction cost of about $385,000 that will likely appraise near $2,000,000. 







Posted by

Mike Young, 203k Team Leader    Mike ready for your 203k order

To learn more about the FHA 203k loan program go to www.203kOnLine.comWhat is your fee? 

Got a 203k project giving you "fits" contact If you are looking for quality 203k software for consultants to speed up the underwriting process..

Skype name: the203kconsultant

877-207-6565  state your name when asked please, it is dialing me at the same time.

following Mike Young on Twitter Facebook You Tube MY 203k Team bug

Comments (1)

Tom Arstingstall, General Contractor, Dry Rot, Water Damage Sacramento, El Dorado County - (916) 765-5366
Dry Rot and Water Damage Mobile - 916-765-5366 - Placerville, CA
General Contractor, Dry Rot and Water Damage

Thanks for helping us to understand what can be done with the 203K loans, there seems to be a lot of misunderstandings Mike.

Jun 02, 2012 11:44 AM