Home › Renovate & build › FHA 203k purchase loan
Renovate

Buy the house that needs work, and finance the work.

The FHA 203k rolls the purchase price and the renovation budget into one loan based on the home's value after repairs, with FHA's 3.5% down payment. The fixer-upper everyone else scrolled past becomes your best deal.

Minimum down3.5% of price plus repairs
Limited 203kRepairs up to $75,000
Standard 203kNo repair cap, structural allowed
Insured byFHA
See if I qualifyCall (800) 511-3330
4.4 on Google · 214 reviewsNMLS 13988Licensed in 15 states + DC
Who it's for

Is the FHA 203k purchase loan right for you?

  • Buyers priced out of move-in-ready homes
  • First-time buyers who want to build equity through improvements
  • Anyone buying an estate sale or foreclosure that will not pass a normal appraisal
  • Buyers who want a new kitchen and bath from day one
How it works

Three steps from here to closing.

Bids and scope

You choose a licensed contractor and we collect the bid. A HUD consultant is required for the standard 203k.

Appraisal on the after-repair value

The appraiser values the home as if the work were done. The loan is based on that number.

Close, then renovate

Repair funds are held in escrow and released to the contractor in draws as work passes inspection.

What you'll need

Requirements at a glance.

  • FHA credit and income guidelines (580+ score for 3.5% down)
  • Licensed, insured contractor with a written bid
  • Work must start within 30 days of closing and finish within six months
  • Primary residence, one to four units
  • Limited 203k: repairs up to $75,000, no structural work
Straight talk

The upside, and what to weigh.

Why people choose it

  • One loan and one closing for the home and the renovation
  • Down payment is 3.5% of the total, not 3.5% plus cash for repairs
  • Can finance up to six months of mortgage payments while the home is uninhabitable

Things to consider

  • Contractor and consultant requirements add time and paperwork
  • FHA mortgage insurance applies
Common questions

Asked on almost every first call.

Can I do the work myself?

Generally no. FHA requires licensed contractors, and self-help is only allowed in rare cases with proof of skill.

Limited or standard?

Limited covers cosmetic and minor work up to $75,000 with no consultant. Standard covers structural and major work with a HUD consultant managing the draws.

What can the money be used for?

Kitchens, baths, roofs, HVAC, flooring, windows, additions, accessibility, even energy improvements. Not luxury items like pools.