The FHA 203k renovation loan is a great way to not only purchase a home, but also to make necessary home improvements without breaking the bank! This loan allows funds for home improvement to be added to the total purchase or refinance amount, and keeps it all in one loan with a low down payment and one monthly payment for your convenience!
The program has many advantages, like the allowance of repair or rehabilitation of items that are usually too major for most lenders (like foundation work), and the loan closes before the renovations even begin. You can get up to 110 percent of the after-improved value of the home based on an appraisal agreement. With the loan, you can focus on the areas that need the most work, from foundation repair to roof replacement or all the way down to painting and appliance replacement.
There are two kinds of 203K Loans – regular, for those that need structural repairs, and streamlined, for those that need non-structural renovations.