Loans By Kathy: FHA 203(k) financing – General Guidelines

FHA 203(k) financing – General Guidelines

FHA 203k, mortgage,loan,first time home buyer

The FHA 203(k) rehab financing follows the same general guidelines as the regular FHA 203(b) loan.

Here are a couple of program characteristics that apply to the FHA 203(k) loan:

·        allows the borrower to finance up to $35,000 for repairs

·        can be used with the $100 down HUD REO property

·        the repairs can be completed after closing

·        the loan must have an automated underwriting approval

·        the credit eligibility is the same as other FHA programs

·        Cash out refinance is are not allowed

·        one time closing

·        rehabilitation funds escrowed by lender and disbursed as work is completed

·        can be used to update the home, correct health and safety issues, or pay for high-cost items such as roofing, flooring, HVAC, or appliances


Here is a link for additional information on the FHA 203(k) loan program:

FHA 203(k) Financing - Eligible Properties


For more information about this financing program please give me a call.


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Kathy Sheehan Senior Loan Officer






Bay Equity LLC

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11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

800.BAY.3703 Bay Equity LLC NMLS ID#76988



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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.


Comment balloon 6 commentsKathy Sheehan • February 25 2012 12:59PM


Kathy, you've explained the 203k loan very well.   I know a lot of lenders don't like doing these loans, it's good to know that you're a pro with them.

Posted by Jen Bowman, Realtor - Anna Maria Island & Bradenton FL (Keller Williams on the Water) over 6 years ago

Great Post Kathy,

I wish more lenders were qualified to do these loans, because there ara a lot of properties in my area that will only close if there is a cash buyer.  I re blogged your post and suggested it for a featured post.

Posted by Greg Gillespie, CRS / Broker Owner (GumTree Realty / Genesis Realty Services,Inc) over 6 years ago

When my son was looking for a home he was considering using the 203K program, we had a hard time finding a lender that knew how to deal with these types of loans. I do appraisals for HUD, and there are a lot of properties out there that could use this type of financing.

Have an awesome day.

Posted by Michael S. Bolton, MN Appraiser (Michael S. Bolton,Inc.) over 6 years ago

Jen, thanks for the nice compliment.  I have about 4 blogs written so far with a few more to come.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 6 years ago

Greg, you are right, so many originators don't want to do these loans because they tend to be more time consuming.

Thanks for the suggestion, it is appreciated.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 6 years ago

Michael, having all of the pieces in place makes it much easier to get the loan done!

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 6 years ago