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”






  • Linda

    Reply Reply August 17, 2016


    • 203K Mortgage Lender

      Reply Reply August 18, 2016

      Hi Linda,

      Whether purchasing or refinancing the additional funds that come with your 203k loan are reserved for your renovations so cash out to the borrower wouldn’t be an option. Hope that clarifies.

      Best of Luck.

  • Cindi

    Reply Reply July 27, 2016

    If I am applying for a refinance and home improvement loan which type do I want and would I need a down payment for this? What are the current rates and APR% ?

    • Hello Cindi,

      A 203k refinance loan combines both types of loans. So, there is no need to decide between a refinance and a home improvement loan. Your new 203k loan would pay off your existing loan(s) if any and preferably at a lower rate than your existing rate plus with the additional funds for home improvements. No down payment is needed on a refinance but if your new loan balance exceeds the maximum loan to value then you might need to bring in funds to close. If it’s a purchase then yes, a minimal down payment is needed. As far as current rates and APR’s your lender would be able to answer those questions.

      Best of luck.

  • WV

    Reply Reply May 29, 2016

    I am in the process of renovation through a 203k streamline. My GC refused to finish all the work on the scope of work and only completed the bulk (shingles, carpet, and kitchen appliances). He was given a notice of his performance and what work that needed to be done. He agreed and came back to work for a short period. After he continued to refuse to do all of the work, I discovered that he tried to cut corners (insulation placed on top of bat feces, pipe insulation the wrong size, flooding of two bathrooms etc.) and I notified him through certified mail that his service was no longer needed. He was given %50 upfront, instead of not giving him anything else, I offered payment but he declined and stated he wanted more. I filed for arbitration and explained the situation. He has now counterclaimed and stated that the scope of work was complete and I agreed but I am withholding payment. Am I able to finish out the work that he did not complete while arbitration is in process? Looking at discolored walls, holes, paint on the floors, jammed door on the electrical box, etc. are becoming depressing to look at.

    • Hello WV,

      It sounds like you and your contractor are at a crossroad and because you are headed towards arbitration it would be wise to seek some legal advice as well as advise from your lender on this matter. Hope it all works out.

      Best to you.

  • Shea

    Reply Reply May 23, 2016

    We closed on a 203k loan to convert a single family home into a quad. When applying for a permit to convert the single family into a quad we found out we must bring the property up to code and sprinkler the entire house. This add exceeds our contingency and we can’t afford to pay this out of pocket. We closed with the expectation of turning the house into a quad, can we change our direction and convert the house instead into a duplex to stay on budget and complete the project within our 6 month time frame?

    • Hello Shea,

      A major concern that stands out by adding less units than originally planned would be the appraisal report and value. The appraisal would have been prepared based on the value of a 3-unit and changing to a 2-unit could seriously impact the value. So, your first phone calls should be to your HUD Consultant and Contractor to see if there’s any ‘extra’ money on other items that can be moved to the required sprinkler system.

      If so, everyone will need to monitor the project carefully so as not to alter the plans and specs the appraiser used to determine the ‘after improved’ value. If not then another resolution would be needed, maybe even the one you are suggesting but that would involve approval from your lender so that you are not in jeopardy of defaulting on the terms and provisions of your mortgage loan.

      Best of luck

  • Samantha

    Reply Reply May 1, 2016

    We have a 203k standard loan and the construction was near completion until our contractor informed us they were out of money and couldn’t complete the job as originally specified. In addition, we as the homeowners have been purchasing materials in order to keep them going until they received their money from the draw request. Now that they are claiming to be out of money, they aren’t willing to reimburse us for the money we put out along the way, even though these are materials that are clearly listed in their cost write up as part of the original proposal for the project. Are we entitled to be reimbursed for these out of pocket expenses? What type of recourse do we have to get our money back and to get them to complete the job?

    • Hello Samantha,

      That’s unfortunate to hear and sounds like the safety nets on how and when the funds were supposed to be dispersed didn’t go as planned. With that said, an explanation on the authorized draws with your HUD consultant and where the money went is a good place to start then a call to the Draw Administrator at your mortgage company to express your concerns. As far as advancing funds, that is not recommended as then you do lose your leverage with the contractor so If reimbursements are not possible then that might become more of a legal matter between you and your contractor.

      Best of luck to you

  • fort clark

    Reply Reply April 28, 2016

    with a low credit score can I get a 203k fha loan to buy a home.

    • Hello Fort,

      That would depend on how low is your credit score because each Lender regardless of the type of loan can have their own minimum or exceptions. In the case of 203k loans most lenders seem to favor a 640 or higher (middle score) between the three major credit bureaus, even though FHA guidelines will allow for lower scores.

      Best of Luck

  • Tamara B

    Reply Reply April 1, 2016

    I have been trying to finalize my 203k loan for weeks now. I cannot get a clear answer from the mortgage company as to when we may be able to close but instead just keep getting two weeks. We’ve gone back and forth with Underwriting for 4-5 weeks now and they keep coming back asking for small things without much detail. Now they’ve requested our GC have a license which specifically states a general contractor but in CT the department of consumer protection doesn’t have a GC license they have home improvement contractor license which is what we provided, yet they are insisting on it. I am at a loss as what to do next. Is this common?

    • Hello Tamara,

      Unfortunate to hear about the delay. It sounds like your lender wants to make sure that the work will be done by someone with the appropriate credentials which protects you and complies with them. Each state can have different license requirements so it is a valid concern and common to confirm the right one is in place for those who will be doing the work on your home. With that said maybe your contractor can provide additional verification from the necessary jurisdictions where the property is located to satisfy the lender. If not, then you might need to find someone else to do the work that can satisfy both you and the lender. In either case, hopefully all will work out and soon.

      Best of luck

  • Joseph

    Reply Reply January 11, 2016

    If I have a credit score of 618 and my wife has 689 and we already have been pre approved for a FHA loan do they have to check my credit again for a 203k loan? And what is the minimum score I need for a 203k loan.

    • 203K Mortgage Lender

      Reply Reply January 14, 2016

      Hi Joseph,

      Whenever you decide to go with another lender different from your original one for an approval or pre-approval it is typical for them to run a new credit report which will be under their name even though it was already recently done. The good news is that multiple inquiries for the same product, in this case a home loan within a short period of time won’t significantly, on its own, impact your credit. As far as minimum credit scores, that would depend on the particular lender.

      Best of luck

  • Joseph

    Reply Reply January 6, 2016

    If I’m already per approved for a $200,000 FHA loan, is it to late to apply for 203k loan? If not what are the steps and do my lender have to rerun my credit.

    • 203K Mortgage Lender

      Reply Reply January 11, 2016

      Hello Joseph,

      The answer is “NO” it’s not too late to apply for a 203k loan unless you have a property under contract, it’s passed your loan contingency and you’re getting ready to close then that’s a different story. So the first step is to make contact with a 203k lender to re-apply. Your new lender will need a credit report issued under their name but there might be ways to get your current one re-issued to them. It’s best to ask your specific lender on that matter if it concerns you. The good news though is by using a 203k lender it will give you the option to use the FHA 203k with renovation funds or the FHA 203b that doesn’t come with any, without having to start the process over again and with the same lender.

      Best of luck

  • Nancy Duval

    Reply Reply December 22, 2015

    I am getting approved for a loan of $155,000 but my question is if I go with the 203K loan, how much can the house be, do they take the x amount of dollars to pay for renovations from what you get qualified for?

    • 203K Mortgage Lender

      Reply Reply December 28, 2015

      Hi Nancy,

      If you get approved for $155,000 loan then the purchase price of the home with renovation dollars combined will need to be no more than $155, 000.

      Example: $100k purchase price plus $55k in renovation cost equals $155k total or any other variation just as long as you are within the max you qualified for.

      Hope that helped, best of luck.

  • Francisco

    Reply Reply November 19, 2015

    Im in the process of buying a home with a 203k loan. I am a journeyman residential carpenter with 10 years of experience but i do not have my general contractors liscence. Am i allowed to do the work myself? The lender my realtor works with says they don’t allow it. What lenders do allow it?

    • 203K Mortgage Lender

      Reply Reply November 30, 2015

      Hello Francisco,

      Your question regarding, if you can do the work yourself is one that many buyers or current homeowners have interest in doing. The answer though is really up to your lender and the type of work you are requesting to do. Having a license or being able to show proof that you are more than capable is necessary if allowed but regardless the projects are still estimated like any other professional contractor work with Labor & Material. This way if for any reason it can’t be done by whoever initially finding a replacement doesn’t become an issue as it has already been priced accordingly.

      Best of Luck

  • Diane C

    Reply Reply November 2, 2015

    What is the average time to close a 203 k loan
    How long does a lender need to provide loan approval for a 203k loan
    Who traditionally holds escrow funds for the rehab, the lender or the title company
    Is there additional fees for holding escrow/additional disbursements/title updates

    • 203K Mortgage Lender

      Reply Reply November 12, 2015

      Hi Diane,

      The average closing times for just about all residential mortgages have increased due to some new waiting period guidelines that recently came into effect in October 2015. With that said it’s definitely possible to close a Renovation loan in 45 days if the scope of work is identified quickly if not then 60 days is a safer bet. Because, identifying the scope of work and agreeing on a price for that work between you and the contractor(s) can take a while and the lender can’t order an appraisal without knowing that information.

      The time needed for loan approval would be less than the closing times mentioned but how much less depends on the lender because some lenders will require a full file with an appraisal before going to underwriting and some will submit with just a bid, it’ll depend on the lender’s policy. Pre-approvals can be done much sooner as typically there is no property identified yet.

      On a Rehab loan, the lender holds escrow funds for the rehab unless they have something different setup outside of industry standard practice. As for fees, there’s always a cost for extra work (in any line of work), you’ll have to consult with your lender about what those costs are and if they’re financeable in your scenario. Generally speaking, most fees associated with a rehab loan are financeable.

      Best of Luck

  • Tracy K

    Reply Reply October 2, 2015

    Two folded question. I am selling my house as a flip to an investor and have been trying to find a house in the interim. I have had two houses pulled out from under me before I could act due to not having a solid offer on my house. Can I get approved for the full amount of the house and est repairs so I can have something to hold that house and then have my down payment be larger when the deal is finalized, say the cost of the house leaving the reno money only financed? Also, husband has not so good credit, mine is ok. Can I be the only borrower and use his income as other income without having him be a co-signer on the loan?

    • 203K Mortgage Lender

      Reply Reply October 2, 2015

      Hello Tracy,

      Getting pre-approved for a mortgage loan contingent upon the sale of your current house is absolutely doable. It probably would be best to go with the worst case scenario of what the proceeds will be from the sale of your house and what that will translate into getting pre-approved for your new loan, this way any additional funds for the down payment would be optional for you and you can adjust your new loan amount size accordingly. As far as using other income for qualifying, it would need to be verified that it is yours not someone else’s for it to be used. If the income belongs to someone else then that person would become a co-borrower/signer and would need to qualify along with yourself.

      Best of Luck

  • Jolene Stotts

    Reply Reply September 10, 2015

    Can a seller have a home inspected by an FHA improved inspector/consultant before there is a buyer and have the inspection be accepted during the loan process? Need to get an idea of the extent of repairs and cost before setting a sale price.

    • 203K Mortgage Lender

      Reply Reply September 10, 2015

      Hi Jolene,

      A seller calling in a HUD consultant prior to finding a purchaser would not be recommended. Because, the FHA consultant should be selected by the purchaser and Lender since they will be working closely together long after the seller is gone (so to speak). The HUD Consultant will want to listen to the wants and needs of the Purchaser, not the Seller. The driving force to determine a sales price should be the “as is” value, not the potential cost of repairs. If you plan to list your home for sale with a real estate agent then they should be able to assist you with that process.

      Best of luck

  • Shawn

    Reply Reply August 18, 2015

    My question is….
    I have a home I want to purchase from the seller for $5000.00+6000 in taxes owed
    The renovations for the house will be around 70,000
    I can afford to pay the seller the $5000 and set up a payment plan with the city for the taxes owed ……. Can I still get the 203k loan for the $70000 without living it ….The house is uninhabitable in its current condition and I will still be in my apartment while it’s being renovated. I do plan on living in the home once it is fixed up.
    Please tell me yes, I can still get this house with the standard 203k loan.

    • 203K Mortgage Lender

      Reply Reply August 31, 2015

      Hi Shawn,

      Although the 203k loan is for owner occupancy it’s not necessary to live in your property during the renovation period plus the 203k standard will allow you to finance up to six months of payments into the loan for that very reason. So, if you need time before moving in to make the property habitable then yes that is an option for you.

      Best of luck

  • Soon-to-be New HomeOwner

    Reply Reply June 17, 2015

    I have been pre-approved for a 203k loan and a bank has agreed to purchase the loan once completed. I am currently awaiting a response from the underwriter. The home I am purchasing needs 8-10k in repairs. No major repairs are needed. My concern is if all goes well and we close and the loan goes through then what? The home needs some work completed before I move in. But I cannot afford to pay mortgage and rent. Also, I believe work cannot begin until the first renovation check is cut which can take up to 4 weeks. Are mortgage payments due immediately? Also, does the renovation process have to wait for the initial partial payment to begin? I am afraid of being forced to pay the mortgage but still have to live somewhere else, i.e. pay rent. Any information will be helpful.

    • Hello soon-to-be New Homeowner

      It would seem that your 203k Loan Officer may not have properly counseled you on possible options and the process.

      “On a standard/non-streamline 203k, you may finance mortgage payments for the number of months you’re unable to inhabit your home. This option though isn’t available on a streamline 203k so payments would start at their scheduled time.

      As for your comment about the start of work, timing of payments, etc. this is “Lender specific” but generally work should start within the first week of closing unless otherwise noted in advance. For example for permits. So, for the most part delaying any work shouldn’t be necessary If the work and payment disbursements were already planned and agreed to before closing as it should be. This is where it would be best to address any concerns with your specific lender.

      Best of luck

  • Eva

    Reply Reply May 19, 2015

    I am in the very early stages of pursuing a 203K loan. I understand that I should get pre-qualified for the loan first. After that step, are there certain rules to follow when searching for a home, i.e. is there a maximum price the home can be listed for? Is there anything that would disqualify a house for the 203K loan? Also, could the seller have any say-so on whether a 203K loan can be used to purchase the home?

    Thanks in advance!

    • Hi Eva,

      Good to hear you’re pursuing an FHA 203k renovation loan because there are advantages. You are correct, getting pre-qualified or better yet pre-approved is the first step. The difference between those two…providing more documentation for the most part.

      On searching for a home…Once you are given the green light by your renovation loan specialist you are pretty much free to pursue the search of your home just like any other residential financing.

      On the price of the home…No maximum on list price just a maximum loan amount based on the county where the property is located.

      On anything that would disqualify a house…That is when a 203k/renovation loan would have its advantages because the condition of the home is no longer as much of a factor like other type of residential financing.

      On whether the seller has a say on a 203k loan being used…A seller could prefer one type of offer over another but their bottom line would still be the same, how much they will get, how long it will take and making sure the offer is strong enough to close.

      One thing is for sure and that is the hurdle of property conditions are no longer as big of a factor for both buyers and sellers with this type of financing.

      Best of luck to you.

  • Anthony

    Reply Reply May 12, 2015

    I’m in process of getting all my ducks in a row to obtain an FHA 203K Renovation Loan. I’ve consolidated my revolving debt into a personal loan, paid it down along with other debt, etc. My TransUnion and Equifax scores were 828 as of this morning. And now I’m looking for 203K Loan Service Providers and 203K Loan Contractors to help me pull together details necessary to complete my renovation as it looks like my best financing option, but I am having a hard time finding contractors versed in 203K projects in my city.

    I live in the 72901 zip code and owe a balance of $159,000 on my $175,000 mortgage — my primary residence which needs to be rehabbed (i.e.$20,000 to $30,000 in foundation repair related excavation, then (if it makes cost to value sense) new HVAC, windows, finishes inside and out, etc.). I just do not want to over improve the home.

    A similar size & age home across the street sold for $230,000 on Jan 5, 2015 in maintained/not updated condition . And other updated/maintained homes on my street top out in the mid three hundred thousand range as it is an older established neighborhood.

    Can you direct me to reputable, reliable and knowledgeable 203K contractors in my zip code versed in 203K rehab projects?


    • Hey there Anthony,

      Sounds like you are on a renovation mission and the goal is in sight. In regards to the contractor, they might not be familiar with 203k financing but they do understand the concept of getting paid as work gets completed which is how it should be so it’s just a matter to what extent a contractor can comply with that type payment arrangement. Maybe explained that way could make the search for a contractor easier because referrals of contractors are not made on this site. Now keep in mind some contractors will have more resources than others so this will narrow down who the more established one’s are which should benefit you.

      Best of luck to you.

  • Thomas

    Reply Reply May 4, 2015

    Can the 203K be used to add a garage to a property we want to that is a manufactured home on a full basement? (built in 2005 new and on the basement)

    • Hello Thomas,

      The answer is “yes” the 203k can be used to add a garage to your property. The “full / standard 203k” is what would be needed to accomplish that.
      Just an FYI on two items…
      One, a detached garage as supposed to an attached garage can be questionable depending on the lender.
      Two, finding a 203k lender who will do a manufactured home is rare or might possibly be non-existent

      Best of luck

  • Larry

    Reply Reply April 22, 2015

    Can a 203k loan be used to build an additional room?

    • Hi Larry,

      Absolutely!!! That one was easy.

      FYI – A full/standard 203k is what you are in need of.

      Best to you

  • Rachel

    Reply Reply April 20, 2015

    I have found a home that is a HUD home. It needs repairs, biggest issue being the basement wall is cracked. I have found a contractor that can do all the work that is needed with the amount we are able to finance. My question is if for any reason the work is not complete or the lenders appraisal comes back that the work on the basement isn’t up to their standards and we can’t finance anymore money to get additional work done to it, will we be able to get our closing costs back or are we going to end up being out all of that money for closing costs and the house?

    • Hello Rachel,

      The Home improvements that are financed into your total loan are reviewed and approved by…You, your Lender, Contractor etc. so there really shouldn’t be any misinterpretation of what is expected. Any improvements should be done correctly and complete to your satisfaction which benefits you, protects the lenders interest and for the contractor to get paid. That is why the funds are disbursed after a phase completion not before and will need your signature. If your transaction involves a HUD consultant then you can take up those concerns with him/her as they do play a role in the work to be done & disbursements. If it does not involve a HUD consultant then just make sure the work is completed satisfactory (as agreed to initially) before ordering the inspection for release of funds.

      On the issue regarding the money for closing costs and the house it would seem you might be under the impression that improvements are done before you are the actual owner of the property when in actuality you will already own the home once you are at the improvement stage. So, nothing lost there you already own the home regardless of any possible hiccup during the improvement phase.

      Hopefully that help clear up some of your concerns but if not then contact your FHA 203k Loan officer.

      Best to you

  • Ruthy

    Reply Reply April 13, 2015

    If I have a property that I own free and clear without any liens or mortgages that is inhabitable but have a high debt to income ratio because of a recent divorce (alimony and child support) can I still qualify for a 203 K standard loan to rehab my house?

    • Hello Ruthy,

      You can definitely obtain an FHA 203k loan on a property that is free and clear (no liens or mortgages) plus inhabitable as long as it will be owner occupied once it is habitable.

      Now on your concern about having a “high debt to income” that would depend on how high and other compensating factors. In other words…the amount of the loan compared to the value, credit scores, how long on the job etc. Assuming all else is good then really what it will come down to is the amount you will qualify for and whether that amount will be suitable enough for you to bring your house into a habitable state or much further beyond if that is your preference.

      There is only one way to find out and which is “Free” so go ahead and contact a 203k specialist.

      Good luck and best to you.

  • Gredys Companioni

    Reply Reply March 6, 2015

    Can the loan be used to “finish” a home? In other words, a new house that someone has constructed and stopped short of putting in all the fixtures and appliances and putting in the flooring and painting it. If you only need 35K to finish the home, can you apply for an FHA 203k?

    • Hello Gredys

      Using a 203k loan is a perfect solution to “finish” off a home where work (minor or major) was started but then left undone or abandoned as long as the property is at least 1yr. (12 months) old. If it’s a brand new property (never sold or got a certificate of completion/occupancy) then you would need to look for another renovation loan alternative.

      Best of luck

  • Debra Cooks

    Reply Reply March 2, 2015

    If you Rent with options to buy and the house needs fixing can you still get a 203 to help.

    • Hello Debra,

      If you are, or plan to rent a house with an option to buy, the answer is yes, a 203k loan can be used when it’s time to purchase the property. And, If you’re going to put some portion (on top of the normal rent) of your monthly payments towards your down payment, then you should document the terms of that agreement along with some type of proof of market rent. By having these things in place it will make it a much smoother transaction for both you and the lender when it comes time to start the buying process. If you can, speak with a renovation specialist 6 to 12 months ahead of the buying process just to make sure you have all your ducks in line with that particular 203k lender you choose.

      Best of luck

  • Debra Cooks

    Reply Reply February 20, 2015

    We found a home for 50000 and it needs fixing my husband credit is low and we been saving money for our closing costs my head is retired from the military if we need more closing costs will the 203 help us with closing costs

    • 203K Mortgage Lender

      Reply Reply February 26, 2015

      Hi Debra,

      A 203k is for combining both the mortgage and renovations/home improvements into one loan only. Closing costs though can be paid by the seller. On FHA financing you can ask the seller to pay up to 6% of the selling price to assist you the buyer with costs associated with your loan and buying a house so that is where the help can come from on costs.

      Best of luck

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