203k... What are you allowed to fix?

2 Replies

Hey BP,

I am pretty dedicated at this point to go the FHA then house hack route to begin my real estate career. One of the glaring reasons for this decision is the distinct lack of zeros in my bank account.

Of the additional challenges I'm running into with my lack of start up capital, post purchase remodeling is a big one! Luckily soon after uncovering my problem, I seemingly found my solution, 203K loans (thanks federal government!). 

As awesome as 203k loans look to me, I am wary of what they actually imply or how they restrict you. For instance, I read somewhere (I can't seem to recall at present) that they were not applicable for any "structural" repairs... can anyone confirm if this is correct and if so what applies as "structural"?

I suppose the main focus of my question here is what are the major restrictions behind a 203k loan, what are the reasons I would NOT want to use one?

Thanks, as always folks!

You can do structural work with a full 203K, whereas you cannot with a limited 203K. The 203K program is split between two categories - big projects over $35K (full) and little projects under $35K(limited). However if you do structural work, it falls under the full 203K category, even if you're not over the $35K limit.

@Jordan Hanksion , @Ryan Gillette is correct. FHA 203(k) full will allow you to cover structural items. If the property can't be occupied right away, then you can roll up to 6 months of mortgage payments into the loan to allow for the work to be completed.