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Recommended steps to purchase a home using an FHA 203(k) loan: 

  • The Home buyer selects Community Mortgage Corp. as their 203(k) lender and a real estate agent knowledgeable of the FHA 203(k) loan.
  • Home buyer performs a credit pre-qualification at Community Mortgage Corp.
  • Home buyer locates a property and signs a sales contract.
  • Special provisions in contract (Repairs contingent upon home inspection, 203(k) consultant and contractor bids not to exceed $                     )  & (Borrower will complete inspection, bids, feasibility study and HUD consultant approval by (exp - 15 bus. days)  date.
  • Home buyer chooses a contractor to write up a detailed proposal(s) showing the scope of work to be done, including a detailed cost estimate on each repair or improvement of the project.
  • Home buyer schedules an inspection with a 203(k) HUD Consultant to review FHA compliance improvements.
  • Once the budget is approved by borrower, consultant completes the work write-up with the contractor cost estimates.
  • Appraiser uses work write-up to determine the "after-improved value".
  • Loan goes to underwriting & once all conditions are met.
  • The 203(k) renovation loan closes
  • Renovation funds arrive around 15-20 days after closing made out to borrower and contractor.
  • Construction begins within 30 days of loan closing.
  • Renovations and repairs must be completed in six months or less.

Recommended repairs and/or modifications that are acceptable for an FHA 203(k) Loan?

    Any repairs/improvements/modifications that add value to and/or improve the property are acceptable for a FHA 203(k) Loan. All improvements must comply  with HUD’s Minimum Property Standards and all local codes and ordinances. 

    Here are some ideas of repairs/modifications/renovations for the FHA 203(k) loan (This is not an all-inclusive list):  

  • Structural repairs/modifications (moving walls, repairing foundations, etc.
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of plumbing
  • Repair/Replacement of Electrical wiring
  • Repair/Replacement of flooring (Carpet, Hardwood, Tile, etc.)
  • Repair/Replacement of a Septic system and/or well repair
  • Repair/Replacement/Add siding to the exterior of your home
  • Bathroom and kitchen remodel
  • Painting, Interior or exterior
  • Energy Efficient upgrades (windows, insulation, solar systems, etc.)
  • Weatherization, (storm doors and windows, insulation, weather stripping, etc.)
  • Accessibility improvements for persons with disabilities
  • Add exterior decks, patios, porches
  • Lead-based paint stabilization or abatement of lead-based paint hazards
  • Finish or remodel a basement or bonus room
  • Install new windows and doors 
  • Install all new appliances, including refrigerators, dishwashers, washers/dryers, free-standing ranges, and microwave ovens
  • Limited pool repair is acceptable (max of $1500-subject to lender approval) is allowed under both versions of the FHA 203(k) loan 


        Landscaping and luxury items such as BBQ’s, Gazebos, spas, etc. are not allowed for any 203(k) loan.


Information cited from and HUD