FHA 203K Question? Post it Here

Do you have a FHA 203k question you’d like to ask a 203K Specialists?  Just post it here on the blog.

Scroll down all the way to the bottom of this page (the QA post page) and type your question in the “Leave a Reply” box and press “Submit”

Your question does not have to be FHA 203K related, it can be general FHA or Conventional questions as well.   A 203K Specialists will answer your question the best to their ability.

We look forward to hearing from you!

“Your FHA 203K Mortgage Lender”






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  • Star

    Reply Reply January 9, 2019

    I recently sold a home on ShortSale, and looking to buy a home that needs work. Price range of home 350k. Reno cost 200k. Wondering if I’am a candidate for a 203K loan. I am self-employed owner of a construction company and my wife is a full time teacher.

    • 203K Mortgage Lender

      Reply Reply February 27, 2019

      Hi Star

      Buyers who have had a short-sale after selling their previous home can use FHA financing but the “wait time frame” to purchase again is usually 3 years but could be less if extenuating circumstances caused the hardship for the short-sale.

      Best of luck

  • Mike

    Reply Reply November 13, 2018

    I have closed on a property with a 203K loan, and was wondering if it is possible to change the scope of work. No construction has started, as we are waiting for permits to be approved. The original plan that was submitted to the bank has changed, as the county is allowing us to build 400 additional sq ft. With this change, some line items can be changed and there will be sufficient money in the 203k to completed the project. Also, if we are allowed to change the scope of work, will this require another appraisal?

    • 203K Mortgage Lender

      Reply Reply February 27, 2019

      Hi Mike,

      The issue you’ll be facing is that your loan closed based on the original Scope of Work and the appraisal was based on that project and those numbers. This is not say that minor changes won’t be approved that possibly can include moving or changing the line items. However, it appears that you’re considering changing the floor plan which could seriously impact the appraised value and may also require additional engineering/architectural designs.

      So, communicating directly with the Draw Administrator would be the first step on what will be acceptable or required.

      Best of luck

  • Heidi

    Reply Reply September 26, 2018

    Hi, we are trying to purchase a foreclosure home in need of repairs that we have allocated funds to repair. We submitted the offer and have already been approved for a conventional above the purchase price of the home. After the appraisal, which appraised the house prior to renovation to be about 30,000 over the purchase price, our lender indicated that the repairs would need to be done prior to purchase, since it is a foreclosure it isn’t clear that the bank would be willing to make the repairs. My question is how do we proceed, should we do a 203 or a renovation loan? what are our options. Thanks

    • 203K Mortgage Lender

      Reply Reply October 22, 2018

      Hi Heidi,

      Your situation is a common one where sellers won’t or can’t make repairs to satisfy the lender request for improvements before close. That is when a renovation loan like the FHA 203k comes into play. So, your options would be this type of loan, take a chance and make the repairs upfront with your funds if allowed or the bank that is foreclosing cooperates.

      Hope it all works out best to you

  • Kimberly

    Reply Reply September 14, 2018

    I’m in search of renovating the home I’m in and wondering how do I go about getting a 203K loan to get the process going it’s a older home and outdated need quite much renovation. Please let me know how I get the loan process going for the 203K loan. Looking at about 35000

    • 203K Mortgage Lender

      Reply Reply October 22, 2018

      Hi Kimberly

      Getting the process going on the 203k loan is an easy one and similar to other home loans except with the added renovation funds. The first step is to contact the renovation loan specialist for your state and they will guide you through the process.

      Best to you

  • Tana

    Reply Reply June 24, 2018

    I have found a home that I like to purchase. However, it needs repair. According to the agent the property requires 203k loan only unless it’s purchased cash. With my income status on my last 2 tax return. I have many deductions. I recently purchased 5 properties cash. So I have equity on them and I purchase the properties for investment as rental income. Can I use it as income when it gets rented out prior to approval. As of this time I just purchased it so I haven’t rented it yet. I am confident that I can pay my mortgage. I can even attach those proparties as collateral. What are the chances of getting approved?

    • Hi Tana,

      Proof of rental income on investment properties as well as history of receiving it on your taxes is pretty typical with some exceptions. It is possible some of your deductions can be added back to your income depending on the deduction and if it’s a primary resident 2 to 4 units that is being purchased then those estimated rents can be counted. So, the chances of approval whether it’s FHA Financing or Conventional just depends on looking at the whole picture.

      Best of luck

  • Isaac

    Reply Reply June 5, 2018

    Hi, I am trying to buy my first home and do not know which type of loan best fits for me. My girlfriends mom rents a house off of her friend who is a property owner and she wants to downsize and her friend is willing to sell the house to me, but I would need the right kind of loan to also be able to do some repairs like painting, flooring, adding a bathroom etc, and also Id like to be able to do the repairs myself because its what I do at my job and Im not sure what kind of loan that would be, but I have $7,000 as a down payment, what kind of loan would work around with what I am trying to do?

    • Hi Isaac,

      The FHA 203k Loan sounds like it should work for you as it allows you to both purchase and make the repairs needed. As far as doing the work yourself that would be something to ask your specific 203k lender as most work should be or is required to be done by a licensed contractor / third party.

      Best of luck

  • Victoria Sullivan

    Reply Reply May 22, 2018

    We are buying a house for $269,900. It is already pre-approved for the FHA 203k rehab loan. We’re pre-qualified for $275,000.00 for a VA loan.
    If we are able to qualify for the FHA203k rehab loan, does the re-hab money come out of the $269,900.00, or is it added to the purchase price?

    • Hi Victoria,

      The rehab money that is needed for improving the property is a added to the contract / purchase price.

      Best of luck

  • Scott V

    Reply Reply April 16, 2018

    With a 203K limited loan less than $35k in repairs, what control do I have to ensure the repairs are completed to my satisfaction? Do I have to approve th finished work before the contractor is paid for example?

    • Hi Scott,

      With a 203k limited FHA allows a maximum of two draws and those checks are to be issued to BOTH the Borrower and the Contractor so, therein lies your control the repairs will be to your satisfaction. However, hopefully any issues or concerns you have with the completed repairs would be resolved before those checks are issued. Also, your Lender may have different or more stringent requirements so I encourage you to confirm how your lender will be disbursing the funds.

      Best of luck

  • Raina Tempestini

    Reply Reply March 28, 2018

    we have a house with a big back yard and basemen. we are looking to add living space, eventually in both areas. our debt to income ratio is currently to high to qualify for a conventional cash out refinance, although we have sufficient equity in the property to fund the desired renovations. we were told it is possible to use projected rental income in order to qualify for a 203k home renovation loan. is this true, and, can those funs be used to build a detached unit in the back yard, or would they need to be used to build a basement rental unit? We may also need to include an additional family member living in the house on the mortgage in order to qualify. would this person then need to be added to the title, and if so, what are the costs involved in that process.

    • Hi Raina,

      When considering your project and potential options, the most important thing to remember is that FHA provides guidelines but many Lenders have overlays so, as you’re talking with FHA 203K Lenders, be sure to ask about those overlays.

      The first concern that comes to mind is the zoning for your property. If your property is zoned for multi-unit, the conversion from a single unit to multiple units is an allowable project. However, constructing another detached unit in the back yard is not permitted. Attached units though are allowed.

      The second concern is using the rental income from the newly constructed units. Depending on their overlays, different lenders may look at this in varying ways but FHA guidelines do permit a portion of the projected rental income for qualification purposes.

      Finally, yes, FHA does permit family members to co-sign but here, again, be sure to discuss the requirements with your chosen lender.

      There is a difference between co-signers and co-borrowers and most lenders will not accept co-signers. A co-signer does not have an interest in the property (not on title); whereas a co-borrower does need to be in title. Since most lenders will accept a co-borrower situation, the financial burden to add your co-borrower should be investigated. It varies from state to state from a modest title company preparation fee in some areas to legal/attorney fees in others.

      Hope it all works out and best of luck to you.

  • lisa

    Reply Reply September 18, 2017

    I am wanting to buy a fixer upper in Illinois at 40,000 with an additional 30,000 in renovations. I have very poor credit (480) from bankruptcy that has been dismissed. I can make the payments with no problem. Can I Qualify with poor credit?

    • 203K Mortgage Lender

      Reply Reply October 11, 2017

      Hi Lisa

      When it comes to minimum credit scores each lender will have their own threshold. For the most part many of them like to see a 620 middle score but there can be exceptions depending on the lending scenario. Don’t hesitate to contact one of the lender’s so that at least you know what the possibilities are to move forward.

      Best of luck

  • Sara

    Reply Reply August 22, 2017

    Have to have down payment or closing costs for FHA 203k?

    • 203K Mortgage Lender

      Reply Reply August 29, 2017

      Hi Sara,

      Yes, down payment & closing cost need to be covered but…The FHA 203K (with renovations) follows the same FHA guidelines as the FHA 203b (without renovations) so that means your down payment can come from a gift (from an acceptable source) and closing cost can come from a gift as well or seller contributions.

      Best of luck

  • beth

    Reply Reply August 11, 2017

    I am buying a house with the 203k loan are you allowed to live in the house while the upgrades and renovations are being done?

    • 203K Mortgage Lender

      Reply Reply August 28, 2017

      Hi Beth,

      You are more than welcome to live through all the dust and noise during your renovation but you can also finance a few months of payments to avoid all that chaos as well. It must be a full 203k version and of course must be decided beforehand.

      Best of luck

  • James Graner

    Reply Reply July 27, 2017

    Does HUD keep statistics on how many 203K mortgages are written?

  • Michelle

    Reply Reply July 20, 2017

    We’re in the renovating portion of our 203k loan. In the work order/contract submitted with our 203k paperwork, it includes replacing the front door. This was not mandatory, but a cosmetic change we’ve now decided that we do not want done. Our lender is saying we have to have the door installed since it was in the original scope of work. Is this true? We understand that there were mandatory renovations that would have to be done as part of the loan – but why can’t we change our mind on something as minor as a front door replacement?

    • 203K Mortgage Lender

      Reply Reply August 28, 2017

      Hi Michelle,

      The “Rule of Thumb” is that you may be able to ADD/UPGRADE to the scope of work but you cannot DEDUCT/DOWNGRADE. You’re correct in that certain work is mandatory and other work isn’t however In the needs-analysis stage of the loan, the work you have to do (mandatory) must be bid out first and then anything else (optional) is added to that to yield your complete contractor bid on repairs to be done. The appraisal is then done based on the total work and your loan is underwritten accordingly.

      So, if your loan had not closed yet and you changed your mind on the optional items, it’s possible to change the scope of work then, however once the loan closes, all work agreed to be done, _must_ be completed.

      Best to you

  • Jessica

    Reply Reply April 19, 2017

    We are thinking about acquiring a 203k loan. We were told that the homeowner cannot do ANY of the construction work/remodeling. The homeowner works for a construction company and we would be hiring his company. Is it true that he would have to be hands-off during the construction process? If so, why? What are the laws?

    • Hello Jessica,

      Although HUD/FHA sets base guidelines for lenders not to exceed, Lenders will have their own specific overlays to those guidelines because at the end of the day it’s the Lender’s responsibility to draw a line on what constitutes responsible lending. These overlay guidelines would also apply to any self-help work for FHA renovation loans to assure no conflict of interest and full completion of work as originally agreed.

      Best of luck

  • KCR

    Reply Reply March 12, 2017

    We are looking to purchase a home with the 203k loan. We are wondering what qualifies as rental income. We currently own a single family home and we rent out the in-law suite in our basement. It gets claimed on our taxes every year for the past 3 years and we have a rental agreement in place. Can we use this income to help us qualify for the loan even though it is a single family home?

    • Hello KCR,

      What you’re referring to is called “boarder income”. It’s allowed on FHA transactions (203b, 203k,etc) if you’ve claimed it in your two most recent tax returns, so in your case, you’ll be able to use that income. Be prepared to provide a lease. Please note that on a purchase transaction, you’ll need to document the intent to continue boarding.

      Best of luck

  • LISA

    Reply Reply March 2, 2017




    • Hi Lisa,

      On minimum credit scores for FHA insured loans it’s best to ask your lender(s) as they can vary depending on your personal scenario and lender. Just an FYI…FHA loans without renovations will most likely have more flexibility than FHA loans with renovations.

      On the repairs…”Yes” you’re correct, the 203k loan will take care of those issues and more.

      Best of Luck

  • Joseph Westcott

    Reply Reply March 2, 2017

    Can the purchaser of home do the renovation work himself with a 203k streamline loan

    • Hello Joseph

      It is possible for a purchaser to do some of the renovation but really depends on the lender, the type of work and the purchaser’s qualifications to complete it. Because, all work is calculated with material & labor regardless of who completes it there is usually a high probability it will get done by a third party.

      Best of Luck

  • linda bowers

    Reply Reply November 28, 2016

    Can I get a 203k loan for commercial property in florida?

    • 203K Mortgage Lender

      Reply Reply January 16, 2017

      Hello Linda,

      203k financing is primarily for residential 1 to 4 unit properties with some exceptions for mixed use properties which can be eligible depending on the percentage of commercial use but if approved the renovation funds must be used for residential functions.

      Best to you

  • BKT

    Reply Reply November 28, 2016

    I completed a loan modification more than a year ago where about one-fourth (or $50K) of the principle was deferred. At some point in the next few years I’d like to renovate a dilapidated detached two-story garage-like structure that is at the back of my property into a by-right ADU for the purposes of renting and generating income (FYI: When I purchased my home in 2007 using a 203k, an inspector quoted $75K as an estimated renovation cost for the garage). In a addition to the ADU, I’d like to make significant renovations to the main house (I do not have a quote for these renovations). My question is, how does all of the above play into the amount of a 203K loan I may qualify for?

    • 203K Mortgage Lender

      Reply Reply January 20, 2017

      Hello BKT,

      With the timeline you detailed, it’s too soon to know how your new 203K Lender guidelines will come into play with a Loan Modification in your credit profile. The typical wait period is 12-months but many lenders have their own guidelines and overlays so you’ll need to keep that in mind as you move forward.
      Pertaining to the ADU, this is something else that can’t be answered without more details. A true ADU cannot be used to generate income since they are considered part of the main dwelling unit (a single family residence). If you have the proper zoning for multi-family dwellings, than a Second Unit could be an option but you’d need to check with your local governing jurisdiction.

      Best to you on your future renovation plans.

  • Thomas

    Reply Reply November 23, 2016

    I am looking at purchasing a hud home that has mild mold problems in the basement from a busted pipe. My lender keeps telling me that I can not do mold repairs as part of the post closing repairs with a 203k loan. This home is only a coue of years old and this is the only problem with the house and it’s only a 3200 repair from a certified contractor. Can someone please give me guidance if there is a loan that will allow for thesending kind of repairs?

  • oyoo

    Reply Reply November 7, 2016

    I was approved for fha 203k. My offer accepted and ratified. But when it came closing time, HUD’S consultant inspected the house and recommended twice the amount previously approved for renovation. My Lender doesn’t want to approve no more money. What should I do to get more?
    Thanks. Oyoo

    • 203K Mortgage Lender

      Reply Reply November 15, 2016

      Hello Oyoo,

      It’s unfortunate that you’re having issues especially at this juncture. The HUD Consultant inspection is one of the “FIRST” steps and there’s usually no reason for another HUD inspection prior to closing. When the HUD Consultant does the inspection (usually right after your offer is accepted), the results of that inspection are bid out by your chosen contractor and those figures are presented to the Lender.

      So, without knowing where the first renovation amount came from that your lender was initially working with, it would be a good idea to figure out what went wrong there and see if some type of compromise can be worked out. If not, then get in contact with another lender and find out if you have another alternative.

      Best of luck.

  • Kirstin

    Reply Reply October 4, 2016

    My fiancé and I are looking into buying a property with a foreclosed home on it. We are not sure of the shape of the home on the inside but the outside looks very rough. We are really wanting to build our own home and I know that the FHA loan would allow us to do so, but my question is would we be able to buy this property with a house already on it and tear that down to build a bigger home or does it have to be the same size as the one that was previsoily there?

    • 203K Mortgage Lender

      Reply Reply October 8, 2016

      Hello Kirsten,

      “Yes” your plan to use an FHA 203k Loan to buy a property, tear it down and rebuild a bigger home than the current one is allowed. The existing foundation must be used but can be extend if needed and you would need to use the full 203k version along with a HUD consultant of your choosing.

      Best to you and your fiancé

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