FHA 203 K - Limited Repair Program

Real Estate Agent with Windermere Cornerstone

FHA 203 K - Limited Repair Program

  • Term 30yr or 15yr
  • Eligible properties 1-4 units, manufactured homes & Condo's
    that have been totally completed for at least one year
  • Cash reserves Yes - 1 month PITI
  • Contributions 6% of the lesser of the sales price
  • PLUS cost of rehabilitation or the Appraised value
  • Assumability Yes - To qualified buyer
  • Temporary buy downs Not allowed
  • Consultant Not required
  • Title Date down required upon Completion
  • Completion Period Maximum of 6 months
  • Total Cost Not to excel $35,000




  •  Total cost of Rehabilitation including fees must not exceed $35,000

  •  Mortgage payments calculated on Sales price plus total cost of rehabilitation

  •  Must use the services of one or more contractors to complete the repairs

  •  General contractor is not required

  •  Borrower must provide a written cost estimate and references from a licensed and bonded contractor for each specialized repair or improvement.

  •  All cost estimates must include labor and materials sufficient to complete the work by a contractor.

  •  Architectural exhibits and plan reviewer not required

  •  Final inspection required for repairs exceeding $15,000

  •  Receipts or proof of completion from contractor acceptable in lieu of a re-inspection.

  •  Borrowers must sign a statement before final release of funds that the work has been satisfactorily completed

  •  No extensions allowed

  •  No contingency required

  • Appraisals- The estimated "as-is" value or the purchase price of the property before rehabilitation, WHICH EVER IS LESS, PLUS the total rehabilitation cost OR 110% of the "as completed- to be" market value. FOR EXAMPLE-

Sales price is 100,000. Borrower wants to redo the Carpet, counter tops and paint the interior/exterior. The bids he gets total 15,000. The new market value that we want to see from the appraiser is $115,000. However he comes in at say.....$107,000. No problem .....

We take his appraisal at $107,000 x 110% = $117,700 we're fine! This is a fabulous benefit on this program - don't you agree?

                                                                  SELF HELP

  • If more than one contractor is used the project will be considered self help. This means that the buyer will be doing some or all of the work themselves.

  •  Self help borrowers submit a narrative including the following:



               Borrowers qualifications for doing the required work

    1. When borrower will accomplish work (keeping in mind 6 month renovation period).

    2. How work will be accomplished (if subcontractors will be used), include bids/proposal.

 So if a buyer wants to do his own work, he would provide the bids and make a case for his qualifications to do so.



If you would like additonal information please contact me and I an refer you to a lender who can answer any questions you may have.


Jeremy Bray


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