FHA 203k
Renovation Loans
Buy a home and finance the renovations in a single loan. Transform a fixer-upper into your dream home without needing separate construction financing.
Last updated: March 2026
How 203k
Loans Work
The FHA 203k program allows you to wrap your home purchase price and renovation costs into a single mortgage. Instead of buying a home and then taking out a separate loan for repairs, everything is bundled together with one application, one closing, and one monthly payment.
Purchase + Renovate in One Loan
The 203k loan is based on the future value of the property after renovations are complete, not just the current purchase price. This means you can borrow enough to buy a home that needs work and finance all the improvements needed to bring it up to your standards. The loan amount includes the purchase price plus renovation costs, minus your down payment.
- One loan covers purchase and renovation
- Based on after-renovation property value
- Single closing, single monthly payment
The 203k Process
The process begins with getting pre-approved, then finding a property that needs renovation. You will work with an FHA-approved contractor to develop a scope of work and cost estimates. An FHA appraiser evaluates the property based on both current condition and estimated after-repair value. Renovation funds are held in escrow and disbursed to contractors as work is completed.
- Pre-approval with renovation budget
- Contractor bids and scope of work
- Funds disbursed as work progresses
Down Payment & Requirements
Like standard FHA loans, the 203k requires just 3.5% down payment with a minimum credit score of 580. The down payment is based on the total loan amount (purchase price plus renovation costs). FHA mortgage insurance premiums (MIP) apply, including an upfront premium and monthly premium. The property must be your primary residence.
- 3.5% down payment minimum
- 580+ credit score required
- Must be owner-occupied primary residence
Standard vs
Limited 203k
The FHA 203k program comes in two versions, each designed for different scales of renovation work. Understanding the differences will help you choose the right option.
FHA 203k Limited (Streamline)
The Limited 203k, formerly known as the Streamline 203k, is designed for smaller renovation projects that do not involve structural changes. The maximum renovation budget is $35,000, and the process is simpler with less paperwork. You do not need a HUD consultant for a Limited 203k, which reduces costs and speeds up the timeline. This option is perfect for cosmetic updates like new flooring, paint, kitchen and bathroom updates, appliance replacement, and minor repairs.
- Maximum $35,000 in renovation costs
- No structural changes allowed
- No HUD consultant required
- Faster processing and less paperwork
- Work must be completed within 6 months
- Ideal for cosmetic and minor updates
FHA 203k Standard (Full)
The Standard 203k is for major renovations with no upper limit on renovation costs beyond FHA loan limits for your county. This version allows structural work, room additions, new construction on existing foundations, and complete gut rehabilitations. A HUD-approved 203k consultant must be involved to oversee the project from planning through completion. The consultant reviews contractor bids, inspects work at each draw, and ensures compliance with FHA standards.
- No maximum renovation amount (within FHA limits)
- Structural changes and additions allowed
- HUD consultant required (adds oversight)
- Up to 6 months for completion
- Can finance temporary housing during renovation
- Ideal for major rehabs and structural work
Eligible
Improvements
The 203k program covers a wide range of renovation and repair projects. Here are the categories of work that qualify for 203k financing.
Structural & Systems
Major structural repairs and complete system replacements are covered under the Standard 203k program, allowing you to address the most critical issues.
- Roof replacement and structural repairs
- Foundation work and waterproofing
- HVAC system replacement
- Plumbing and electrical upgrades
- Window and door replacement
- Room additions (Standard only)
- Garage construction or conversion
Interior & Cosmetic
Both Limited and Standard 203k loans cover interior renovations that modernize and improve the livability of your home.
- Kitchen remodel and updates
- Bathroom renovation
- New flooring throughout
- Interior and exterior painting
- Appliance installation
- Cabinet and countertop replacement
- Basement finishing
Safety & Accessibility
Health, safety, and accessibility improvements are a priority under the 203k program. These projects can make a home safe and livable for all occupants.
- Lead paint abatement
- Mold remediation
- Asbestos removal
- ADA accessibility modifications
- Smoke and carbon monoxide detectors
- Well and septic system work
- Energy efficiency improvements
Not eligible: Luxury improvements like swimming pools, hot tubs, barbecue pits, outdoor fireplaces, and satellite dishes. Any work that is not permanently affixed to the property is also excluded.
Ready to Renovate
Your Future Home?
Our 203k specialists will guide you through every step of the renovation loan process. From finding the right property to managing contractor draws, we handle the complexity so you can focus on your vision.