There were many years when you thought of an FHA loan as a low income loan for homes in less affluent neighborhoods. Not any longer, at least for a while longer. Better get yours done asap.
Why would you want an FHA 203k loan in any of these areas? Simply this... you don't want to put all the money down to purchase your home. You would like to keep some cash in the bank.
Example 1: Purchase price $850,000 + construction cost of $100,000. If the property requires repairs of $100,000 you won't likely get a loan of any size on it till the repairs are completed or they are included in a renovation loan. By doing that you get a rate on $729,750 in Walnut Creek, Orinda, and Lafayette at rates lower than a "jumbo loan" for the same amount.
Example 2: PUrchase price for a fire gutted house is only $250,000, renovation cost is $506,000 you get to make it yours for 3.5% down payment, or about $26,250 and it would likely appraise for over a million when complete.
Example 3: We have one that should be closing shortly with purchase price about $520,000 and construction cost about $455,000 that appraised for $1,200,000. That is $300,000 in equity on the purchase of a home in Lafayette. Who would have guessed that this was possible in the current market environment?
If you want to see the maximum loan amounts in your state and county just go to https://entp.hud.gov/idapp/html/hicostlook.cfm