203K Renovation Loans

With a credit score of 580 or above, you can secure your home with a minimal 3.5% down payment. For credit scores ranging from 500 to 579, a 10% down payment is required, making homeownership accessible to a broader range of buyers.

As with all FHA loans, 203(k) loans require mortgage insurance premiums: an upfront premium of 1.75% of the loan amount, and an annual premium of approximately 0.85%, divided into monthly payments. This insurance protects lenders and enables more flexible lending terms.

Flexible loan terms ranging from 5 to 30 years are available to suit your financial needs. It’s important to note that repairs must be completed by a licensed contractor; self-help is not permitted. Additionally, certain reserve requirements may apply to ensure project completion.

The FHA offers two types of 203(k) loans:

• Standard 203(k): Ideal for extensive renovations, this option covers major structural repairs and requires a minimum of $5,000 in eligible expenses.
• Limited 203(k): Suited for minor improvements, it allows for up to $35,000 in repairs, involves less paperwork, and requires the home to be habitable during renovations.

Both options streamline the process of financing home improvements.