203k loan

7 Replies

I've seen a number of posts regarding a 203k loan. What is a 203k loan.

A 203k loan is essentially financing for the purchase of a home and the required rehab to bring it up to snuff.  

Here's the official description: Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home."

Check the HUD site for more information:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203k--df

@Patricia Gemming  203k is a FHA rehab loan, where you borrow money to buy a property that needs some work and also borrow money to get the work done by licensed contractors. NO, you can't do the work yourself using a 203k.

Upen Patel, Mortgage Banker
Federal NMLS# 1374243

Thanks Upen. Is the property and rehab both under the 203k loan? It sounds like it would be two different loan streams. Does it only cover a percentage of the property and or rehab loan? 

Thanks Douglas. Your explanation is very clear. I will  definitely read the information on the link you include it. 

Thanks for the info @Douglas Procunier and @Upen Patel . I read the information on the FHA website but couldn't find any information about any occupancy requirements. Aren't borrowers supposed to live in the property? And if so, is a year enough or do they have to reside in the property until the loan is paid off?

Originally posted by @Miguel M. :

Thanks for the info @Douglas Procunier and @Upen Patel. I read the information on the FHA website but couldn't find any information about any occupancy requirements. Aren't borrowers supposed to live in the property? And if so, is a year enough or do they have to reside in the property until the loan is paid off?

 1 yr is the owner occupancy requirement.

Upen Patel, Mortgage Banker

Federal NMLS# 1374243

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