FHA 203k full renovation Loan - buy a home & make it your dream home

Mortgage and Lending with Henry J Daniels (936) 228-1944 NMLS #209419

FHA 203k Full renovation LoanIf you are looking for that perfect home for your family or need to make major repairs to your current home but don’t quite have the credit or down payment needed for a conventional renovation loan then the FHA 203k full renovation loan may be your answer.


Benefits and Features of the FHA 203k full renovation loan

  • For Primary Residences (1-4 unit family properties) only
  • 3.5% minimum down payment
  • Perfect for properties that may have been given low marks on quality and condition ratings and unable to obtain financing with Conventional, VA, USDA or normal FHA loans.
  • The contractor costs can be built into the loan.
  • No need for a second mortgage to repair the property. All costs are built into the first mortgage, which means lower closing costs.
  • Loan amount can go up to 110% of the After Repaired Value (ARV) from the appraisal
203k Full Allowed Improvements
... and much more, If it is permanently affixed and adds value it may be allowed. Contact us about your project.
Room Additions Adding an Attached Garage
Converting a one-family structure to a two-, three, or four family structure repairing, reconstructing or elevating an existing foundation where the Structure will not be demolished
repairing or adding roofing, gutters, and downspouts; Foundation Repair
Addition of Luxury Items such as Pools or Spas repairing/replacing plumbing, heating, AC and electrical systems
making site improvements that add value Lead Paint & Asbestos removal
Installing or Repairing of Wells and/or Septic Connecting to public water and sewage systems
Termite removal and repair Mold Removal

Contractor Requirements for an FHA 203k full renovation loan

  • Must have a construction contract with a contractor, no self-builds
  • Use of a HUD Approved 203k Consultant is required
  • The Bank reviews and approves your contractor to determine they are adequately qualified to perform the work and complete the job
  • Plans & Specs must have been prepared by a registered, licensed, or certified general contractor, renovation consultant, or architect
  • Plans & Specs must fully describe all work to be done & state when stages of completion will be scheduled, including both the job start & completion dates

Limitations on the FHA 203k full renovation loan:

  • Minimum of $5,000 in repairs are required
  • Ineligible Properties (not all inclusive please call with the specifics of your property)
    • Property Flipping NOT Allowed
    • manufactured housing
    • Condos
    • New construction/never occupied
    • Homes Purchased with Government assistance of any kind such as HUD $100 down, down payment assistance or income such as section 8.
    • Homes constructed less than 12 months from Certificate of Occupancy (CO)
    • Homes being relocated from one property to another
    • Investment/secondary homes are not allowed. The Property must be owner occupied. 
    • Items NOT Allowed on an FHA (not all inclusive please call with the specifics of your project)
      • Recreational or luxury improvements, such as pools, hot tubs, whirlpool baths.  For these improvements,  you would use the HomeStyle Renovation Loan
      • Barbecue pits, bath houses, tennis courts, satellite dishes or tree surgery
      • Additions or alterations to support commercial use or to equip or refurbish
      • Washers and dryers
    • If a refinance, you are not eligible to receive any cash back at closing
    • Renovation Costs may include (not all inclusive please call with the specifics of your project):
      • Labor and materials
      • Soft costs (architect fees, permits, licenses, inspection fees, independent consultant fees, engineering fees, fees charged for processing draws, fees for energy reports (HERS), review of renovation plans)
      • Contingency reserve of 10% of the cost of labor, materials and soft costs) – this is optional unless property is a 2-4 unit property
      • Contractor bid must be given to appraiser to determine ARV
      • If using this loan for Energy Related Improvements, a HERS Energy report must be provided to us and appraiser
      • If funds remain after all work is performed, they will be applied to the loan

So if you’ve been looking for that perfect home or need to fix up your home FHA 203k Full Renovation loan may be the perfect way you can buy or fix up your dream home that you would otherwise not be able to purchase or repair. There is also an FHA 203k streamline rehabilitation mortgage for less than major repairs.


Contact us anytime and we would be delighted to consult with you and your project.

Posted by

Henry J Daniels, Senior National Mortgage Banker for Goldwater Bank N.A.  he specializes in educating clients on the new realities of today's mortgage lending market and providing solutions to all of your home financing needs.  

If you need Custom Home Construction, Rehab, FHA, VA, USDA, Conventional, Jumbo or Construction mortgage Nationwide he can help you understand all of the options available and provide you with true financing choices.  

You may contact him at (936) 228-1944

  Copyright © 2007-2018 Henry J Daniels

The views expressed are mine alone and do not necessarily reflect the views of any company I may work for.

Comments (3)

Roy Kelley
Retired - Gaithersburg, MD

This is excellent information to share with prospective home buyers and their agents.

May 09, 2017 05:48 PM
Henry J. Daniels - Sr Loan Officer

Yes, it's a great program that can help everyone from the sellers to buyers and we have it available in both Maryland and Virginia.

May 09, 2017 05:56 PM
Dave Halpern
Dave Halpern Real Estate Agent, Inc., Louisville, KY (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Many buyers can pick up instant equity by using renovation loans when buying fixer uppers

Aug 25, 2017 05:39 AM
Henry J. Daniels - Sr Loan Officer

They Can even finance more improvements above the appraised value that are long-term equity boosters.

Oct 21, 2017 07:56 AM
Fred Sweezer Sr. CMI, LLC.
Hud Certified 203K Consultant - Long Beach, CA
HUD 203k Consultant

Very good details of the program thanks for your post!

Oct 21, 2017 03:49 AM