Combining Purchase and Renovation Financing

The Federal Housing Administration’s Section 203(k) insurance program stands out for its unique feature of simplifying purchasing and renovating a home. Buyers can finance the acquisition and the necessary rehabilitation through a single mortgage. This streamlined approach combines the costs of buying and fixing a house into one long-term, fixed-rate loan that covers acquisition and rehabilitation expenses.





The Appeal of Home Renovation

Embracing the Fixer-Upper Challenge

Many people are drawn to purchasing and renovating dilapidated properties, whether motivated by the potential to flip the house for a profit or simply to create a dream home. Popular television shows like “Flip or Flop” have glamorized the renovation process, highlighting the challenges and hard work involved. While renovating a home can be rewarding, it often requires careful consideration of many factors, including market conditions and the scope and cost of planned improvements.

What Is an FHA 203(k) Loan?

Streamlining Home Renovation Financing

If you are considering buying a fixer-upper, the FHA 203(k) loan offers a flexible solution to fund the purchase and the subsequent renovations with one mortgage. This rehab loan simplifies the financing of renovations, allowing for a wide range of improvements—from structural repairs to energy efficiency upgrades. If you own a home and want to renovate, the FHA 203(k) loan can support your renovation needs.

Permitted Improvements Under the FHA 203(k) Loan

Expanding Your Home's Potential

The FHA 203(k) loan supports a comprehensive range of renovation projects that can significantly enhance your home’s functionality and aesthetics. Approved improvements include:

  • Structural restoration and modifications
  • Removal of health and safety hazards
  • Updates to improve functional utility
  • Enhancements to energy efficiency
  • Aesthetic improvements to interior and exterior
  • Systems upgrades, including plumbing and roofing
  • Flooring renovations or installations
  • Adding or updating landscaped gardens

Exploring the Types of FHA 203(k) Home Loans

Choosing the Right Loan for Your Renovation

The FHA 203(k) program offers two types of loans tailored to different renovation scopes and budgets:

  • Standard 203(k) Loan: Ideal for extensive renovations that may require architectural or engineering input, this loan is suitable for projects with costs exceeding $35,000, including significant structural work.
  • Limited 203(k) Mortgage: For projects that do not exceed $35,000 and do not require architectural or engineering services, this streamlined option covers minor repairs and cosmetic changes.

Additional Information on FHA 203(k) Loans

Getting Started with Your Renovation Loan

To apply for an FHA 203(k) loan, you must work with an approved FHA lender and meet specific criteria, such as a minimum FICO score of 580. Once you’ve had the loan for six months, you may be eligible to refinance into a conventional mortgage. This program is designed for single-family homes, including units that are being rebuilt or relocated. Up to six months are provided to complete the renovations, subject to possible extensions.

For more details on how to apply for an FHA 203(k) home loan or to discuss your specific needs, please utilize our online application form or contact our FHA 203k Specialist at 800-854-4142.

FHA Loans Help Make Home Ownership 

Possible For a Wider Range of People.

FHA Loans in Texas

An FHA Loan Specialist Ready To Help You

Our FHA Loan Specialists are always available to help you and answer any questions.  You may contact a dedicated FHA Loan Specialist through our website or by calling us directly. You may also chat with us to get a quick answer to your questions.

FHA Loans in Texas

We Make The FHA Loan Process Quick & Easy

Lenders often times will steer their clients away from an FHA loan due to their inexperience with the program.  FHA Loans are a great source of funding for our clients.  We share our knowledge and experience with FHA loans, making it easier for borrowers.

FHA Loans in Texas

FHA Approved Lender

The Federal Housing Administration requires lenders offering FHA loans to go through an extensive approval process. We are FHA-approved and designated as a “Full Eagle” FHA mortgage lender offering FHA-insured home loans in Texas.