Need advice: FHA 203k loan or get home improvement loan later

1 Reply

Hello all,

I have a four plex(Minnesota) that was signed this weekend, and inspection next weekend. I am looking for advice regarding the loan strategy.

4 units in total, 1 vacancy

1. Take a 203k FHA loan, and the 5.5% interest rate to renovate all units.

2. Decline 203k FHA loan, and get a loan from a bank after closing, renovate units as tenants leave.

I have never gone through a 203k process, and am not sure what the best option will be. 

This also leads into if I should evict all the tenant (3), renovate all units before closing, and then post for tenants, or decline the 203k and renovate as vacancies open. 

Not sure on which approach to take here, and really need some advice. 

List of items to be done - (inspection next weekend)


Air Conditioner addition to current forced air furnace


Garage door motor to 1 car garage door

Install recessed lights in living room, and new light fixtures in bedrooms, living rooms, kitchen

Replace light switches/outlets to square plastic white


Remove carpet, tack boards one main floor and top floor

Install vinyl plank flooring throughout main floor

Same baseboard


Paint all wood trim white

Paint kitchen cabinets white

Paint all walls


Remove half of kitchen wall

Sliding door for half bath on main floor


Replace kitchen counter top, and match bathroom vanities with same

Replace kitchen sink

Replace appliances with stainless steel


Replace countertops with same kitchen counter material

General work

Install window blinds on all windows

@Arvin K.   You didn't mention whether or not you plan to live in one of the units in the 4-plex, but I imagine you are or you wouldn't be able to finance with a 203(k) loan.

I guess a lot of it depends on whether you have the funds to do the renovations without the loan, and whether you want to do some of the renovation work yourself?

If you do have the funds, and want to do some of the work like installing flooring, painting, etc. yourself, I would skip the renovation loan and additional requirements that come with it and keep things simple.

If you don't have access to additional funds and don't have the ability or desire to work on the property yourself, and the property won't qualify for regular financing without some of the repairs, then I would definitely recommend the 203(k) loan.