Eligible Improvements Using the FHA 203K Loan

Lately I’ve been asked, “what are some allowable improvements when we use the FHA 203k rehab mortgage”?  I’d like to give you some basic information that you can use to help understand how the FHA 203k renovation mortgage works and what is eligible.

These are prime times for the FHA 203k program more than ever. There is a large inventory of homes on the market that fit the requirements for participation in the FHA 203k and it can be a simple process with the right professionals on board.

Contractors can offer their clients a new way to finance their remodeling projects with the FHA 203K Loan.

The extent of the rehabilitation under the FHA 203k may range from relatively minor (minimum of $5,000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. The types of improvements that borrowers may make using FHA 203k financing include:

  • Structural alterations and reconstruction
  • Repair or replacing well and/or septic system
  • Roofing, siding and gutters
  • Landscape work and site improvements
  • Enhancing accessibility for a disabled person
  • Additions
  • Kitchen and Bathroom renovations
  • Replace/Upgrade existing HVAC systems
  • Replacement windows and doors
  • Finish Basements and Waterproofing
  • Plumbing and Electrical upgrade
  • Appliances, Floor and Wall covering

Items that are not eligible for improvements include; swimming pools, tennis courts, basketball courts, hot tubs; simply, no luxury items

A full FHA 203k allows for complete renovations and rehabs of properties.  Everything allowed in a streamline FHA 203k is eligible for a full FHA 203k.  A full FHA 203k is used for all repairs and renovations over 35,000.

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