FHA 203 (K) Streamlined

FHA’s Streamlined 203(k) program permits home buyers to finance up to an additional $35,000 of home improvements into their mortgage to renovate, improve or upgrade their home before move-in. With this new product, home buyers can quickly and easily finance property repairs or improvements, such as those identified by a home inspector or FHA appraiser. FHA 203(k) can help:

Is A FHA 203(k) Loan For Me?

The FHA 203(K) loan is for home buyers who are buying a 'fixer upper' and are wanting to finance extra cash for renovations along with their mortgage. This program covers most non-structural improvements up to $35,000, with a minimum improvement of $5,000 necessary. 

What types of improvements are covered?

• Roofs, gutters, downspouts
• Heating and air conditioning
• Upgrade/repair plumbing, septic, well, and electrical systems
• Replacement of flooring, windows, doors, siding
• Weatherization, painting, basement waterproofing
• Minor remodels that don’t involve structural repairs
• Purchase and installation of appliances
• Handicapped accessibility improvements

*Anything above $15,000 in total repair cost does require a HUD inspector. The cost of a HUD inspector is roughly $500, which can be added into the loan as well.

What items are not covered?

Properties that require the following work items are not eligible for financing under the Streamlined 203(k):

• Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall
• New construction (including room additions)
• Repair of structural damage
• Repairs requiring detailed drawings or architectural exhibits
• Landscaping or similar site amenity improvements
• Any repair or improvement requiring a work schedule longer than 6 months
• Rehabilitation activities that require more than 2 payments per specialized contractor

Borrowers may not use the Streamline 203(k) program to finance any required repairs arising from the appraisal that are not listed on the list of Streamline 203(k) eligible work Items or that would:

• Necessitate a “consultant” to develop a “Specification of Repairs/Work Write-Up”
• Require plans or architectural exhibits
• Require a plan reviewer
• Require more than 6 months to complete
• Result in work not starting within 30 days after loan closing
• Result in the borrower to being displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after mortgage loan closing

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