Loans By Kathy: FHA 203(k) Financing – Ineligible Improvements

FHA 203(k) Financing – Ineligible Improvements

fha 203k,mortgage,home loan, rehab

You know the types of properties that are eligible and we have reviewed some of the basic program guidelines in the previous posts.  There are some types of repairs that will not be eligible for this program. 

These are:

·        Major rehabilitation

·        new construction including room additions

·        repair of structural damage

·        repairs requiring detailed drawings are exhibits

·        landscaping or site amenity improvements

·        any improvement that will take longer than six months to complete

·        Any rehabilitation activity that:

o   requires more than two payments per specialized contractor

o   requires architectural plans or exhibits or a plan reviewer

o   results in work not starting within 30 days of loan closing

o   causes the mortgage or to be displaced from the property for more than 30 days during the rehab.

FHA guidelines anticipate that the borrower will occupy the home during the rehab project. The insurance companies also require the work to begin immediately.

For more information about the FHA 203K program please check out the following links:

FHA 203(k) Financing - Eligible Properties

FHA 203(k) Financing - General Guidelines

 FHA 203(k) Financing - Eligible Improvements

For more information about the FHA 203(k) rehabilitation loan program please feel free to 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 3 commentsKathy Sheehan • February 25 2012 02:17PM


Kathy, great reminder for those items not eligible for the 203 rehab loan!    We do find properties that need repair with our first time home buyers, and good to know!

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) almost 7 years ago

Joan, knowing what is not allowed is just as important as those that are allowed.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) almost 7 years ago

If the 203K doesn't work, maybe a Homestyle Renovation will.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 5 years ago