What are FHA 203k Loans?
The Federal Housing Administration (FHA) is deeply invested in the rehabilitation of residential neighborhoods and the recovery of the American real estate economy. The 203k FHA program is designed to help homebuyers and current homeowners renovate properties, without going to a bank for a loan after purchasing a home in need of repairs. Instead, FHA 203k Loans provide funds for both the purchase and renovation as one, single loan.
There are two types of 203k home financing options available: Standard 203k and Streamline 203k.
- Standard 203k Loans: Designed for renovations that call for structural changes and require engineering and architectural work. These loans are normally attributed to any renovations that don’t allow you to live in the residence while they are being implemented.
- Streamline 203k Loans: Designed for less costly renovations that will not exceed a total of $35,000. These loans are best for renovations that don’t require consultation from architects and engineers.