Resources and HUD 203k Loan Information

General HUD 203k Loan Information
Standard 203k vs. Limited 203k
203k Resources

General HUD 203k Loan Information

HUD's 203k Limited and Standard loan program can help you to purchase or refinance a property plus include in the loan the cost of making repairs and improvements. Homebuyers can fix up an older home during a new purchase and homeowners can renovate their existing home during a refinance. The renovation costs are included in the FHA insured 203k loan. It is currently only available to persons wanting to occupy the home and the down payment requirement is approximately 3.5% of the acquisition and repair costs of the property.

The 203k loan includes the following steps:

  • A potential homebuyer locates a fixer-upper and executes a sales contract after doing a feasibility analysis of the property with their real estate professional.
  • The homebuyer then selects an FHA-approved 203k lender and arranges for a detailed proposal showing the scope of work to be done.

    ** A HUD-approved 203k Consultant is required to manage the 203k project if the repairs qualify for a Standard 203k loan. For Limited 203k loans, it is highly recommended that homebuyers request a 203k Consultant assist them in creating the Specification of Repairs. To search for a 203k Consultant click here.

  • The appraisal is performed to determine the value of the property after renovation.
  • If the borrower is approved, the 203k loan closes for an amount that will cover the purchase or refinance cost of the property, the remodeling costs and the closing costs.
  • At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs and improvements during the rehabilitation period.
  • The mortgage payments and remodeling begin after the 203k loan closes. The borrower can have up to six mortgage payments put into the cost of rehabilitation if the property is not going to be occupied during construction.
  • Escrowed funds are released to the homeowner during construction through a series of draw requests for work that is completed.

Contact a 203k Consultant and learn more

Standard 203k vs. Limited 203k Loan

There are two 203k rehabilitation loans available. Both the Standard 203k and the Limited 203k allow homebuyers to finance the purchase price, closing costs, repair costs and eligible fees. Both products require only a 3.5% down payment.

Standard 203k Loan
The Standard 203k is used when a homebuyer plans extensive structural work—such as a room addition—or when repair costs will exceed $35,000. A minimum of $5,000 must be used toward repairs for the Standard 203k, and there is no maximum repair amount.

The maximum mortgage, determined in part by the property location, can range from $271,050 to $729,750. Furthermore, the loan must not exceed 110% of the "As-improved" value. Nationwide FHA loan limits are posted by HUD online at

Up to six months of mortgage payments can be financed in the loan amount while the home is under renovation. This helps the homebuyer to pay for alternative housing during rehabilitation.

Additionally, HUD requires a HUD-approved consultant to write up and submit a rehabilitation plan prior to approving the loan for FHA insurance. This consultant will help to ensure the property meets HUD/FHA and local building code requirements. For further details into the HUD Standard 203k loan, see our resources at the bottom of this page.

Limited 203k Loan
The Limited 203k is used when a homebuyer plans uncomplicated, lower-cost rehabilitation on the property. The Limited 203k is recommended for small projects that are mainly cosmetic and do not require structural changes to the dwelling. A maximum of $35,000 of the Limited 203k loan may be used toward rehabilitation, and there is no minimum.

Homebuyers typically use this type of loan to replace heating, ventilation, and air conditioning (HVAC) systems; replace appliances; install new flooring; replace windows and doors; repair the roof; and/or paint the home.

Services of a HUD-approved consultant are not required with the Limited 203k; however, it may be beneficial to utilize a consultant to assist with such items like creating the work write-up, bid requests, and the final compliance inspection. For further details into the HUD Limited 203k loan, see our resources at the bottom of this page.

Homebuyer and Real Estate Professional 203k Resources

HUD 203k Overview - Detailed overview of the standard 203k loan.

How to Buy a HUD home - Detailed guidelines on researching and financing a HUD home.

HUD Approved Lenders - Search for HUD approved Lenders, including 203k qualified Lenders.

HUD Homes For Sale - A nationwide list of HUD homes for sale.

HUD Information by State - Links to state specific HUD pages.

Homebuyers, Homeowners and Real Estate Professionals click here to find a 203k Consultant