FHA 203(k) Standard

FHA has been around for a long time and if you have ever had or heard of an FHA loan you were hearing about the 203(b) loan. The 203k is just a little farther down in the Section 203 loan list. The 203k loan is a fully disbursed loan which allows a borrower to purchase or refinance a property and finance the cost of rehabilitation with one loan. Because it is fully disbursed at closing, the 203k loan can be insured by HUD as soon as the loan closes. The mortgage amount for these loans is based on the projected value of the property with the work completed, taking into account the cost of the work. HUD has taken a strong position to encourage this program and the loan is now easier to originate and close than ever before. Use a consultant. A 203k loan can close as fast as the lender can close a 203b loan.

203k Advantages

  • Up-front MIP can be financed into the loan

  • Non-profit organizations are eligible with only 5% down payment and can buy multiple properties

  • Finance up to 6 months mortgage payments

  • Special HUD down payment programs exist

  • Most closing costs can be financed

  • An FHA loan is assumable