​The FHA 203k loan is a renovation or construction loan, that is backed by the Federal Housing Administration. Both buyers and refinancing customers can combine the traditional “home improvement” loan with a standard FHA mortgage, which allows the homeowners to borrow their renovation costs.

• A Minimum Borrowed of $5,000 for repairs
• A Maximum Borrowed of $35,000 for repairs- (this ends up to be around 30k for the renovation- for most lenders)
• There is a Limited On Some Types Of Repairs. (structural)
• A HUD Consultant Is Not Required But We Recommend It

• There Are No Limit On Repairs
• Any Structural Work Is Allowed
• A Minimum of $5,000 Borrowed For Repairs-
• A Maximum 110% After The Appraised Value
• A HUD Consultant Is Required

• Remodeling of Kitchens & Bathrooms
• Stabilizing Lead-Based Paint if detected
• Installation of Roofs, Gutters, and Downspouts
• Installation or repair Exterior Decks, Patios, Porches
• Installation of New Windows, Doors and Siding
• Remediation of Health and Safety Issues (Mold)
• Installation or Repair of Plumbing, Well And/Or Septic System.
• Installation of Fencing, Walkways, Driveways, and Landscaping
• Installation of New Energy Efficient Heating Systems, and Electrical Service Upgrades
• Replace Missing Or Stolen Pipes

A Homestyle loan is a long-term financing option available to owner-occupied homeowners and buy-and-hold investors that can be used to purchase and renovate a primary residence. This permanent mortgage is backed by Fannie Mae, and typically funds between 65% – 95% of a property’s price and renovations. In order to have their renovation budget approved borrowers must submit a detailed list of repairs, 2-3 licensed contractor bids from approved contractors, and a licensed contractor to oversee the renovations.

• 50% Debt-to-Income Ratio
• 640 Min. Credit Score
• 2 Recent Paystubs
• List of Total Assets
• List of Total Debts
• Mortgage Insurance
• Independent Appraisal

• Installing new flooring
• Removing a load-bearing wall
• Installing solar panels
• Plumbing and electrical updates or repairs

1. Buyer Finds a House:
   The process starts with a buyer finding a house that “just needs something” or may require certain items to be fixed before it can be eligible for financing.
2. Mandatory Repair Items:
   For limited 203ks a home inspection is accepted. However, for 203k (35k++) you need a HUD Consultant. The deficient items on the report will need to be repaired to be eligible for financing (typically these are health and safety).
3. Wish List (kitchens etc.):
   Next, the contractor reviews the property, goes over the mandatory repair list and adds WISH LIST items.
4. Contractor Quote:
   Each line item of work that needs to be done must be itemized with materials and labor costs separated.
5. Packet to Lender:
   A packet will be sent to the lender including the consultant write-up, contractor write-up, contracts, permits required, contractor resume, W2, License, and Insurance information.
6. Appraisal:
   Since the appraisal may uncover additional deficiencies, it is important that the original inspection and work write up includes everything. Renovation costs are added to the value of the house (with certain restrictions).
7. Lender Processing:
   At this point in the process the inspection report, appraisal, and write-ups will be processed and verified. These documents all need to contain the same mandatory repair list.
8. Closing:
   Buyers should be aware that closing can sometimes be delayed, so they may need to wait until work is completed before they can move in.
9. Work Starts:
   HUD wants work to start in 30 days, but permits will need to be issued which usually takes 1-2 weeks
10. Progress Inspection:
    The HUD consultant will make routine progress inspections and submit draws to the lender who will then issue payment to the contractor.
11. Move In:
    You are now all set to move in!