What is an FHA 203(k) Loan?
FHA 203(k) loans are designed primarily for home owners purchasing a home which needs rehab work and the loan includes certain types of rehab costs. The most common FHA rehab loan for home owners (home buyers) is the FHA 203(ks) with the “s” denoting streamline.
Unlike the FHA 203(b) streamline refinance the 203(k) requires full documentation from the applicant to prove income, assets and credit history.
The FHA 203(ks) allows up to $35,000 in non-structural and certain non-plumbing/electrical repairs. You can also combine this loan with the Energy Efficient Mortgage and add another $8000 in rehab/upgrades provided those upgrades are acceptable energy efficienty improvements.
You can find some details about the FHA 203(k) from the HUD site but be careful about some of the information provided by non-HUD approved resources.
