203(k) loan

[Aaron Brill]

I was wondering in a 203(k) loan, how is it determined how much money will loaned towards renovations on a property? Is max amount? Is it based off an appraisal? Thank you for your time

[Kyle Gregg]

Another point to mention is that the amount you qualify for less the cost of acquiring the property isn't necessarily what you can allot for rehab. Based on your HUD consultants appraisal, the rehab may require a 10-20% contingency reserve for any surprises and unknowns about the property. This contingency will eat up some of your total rehab allowance.