2 Replies


I hope this discussion finds you well! I wanted to reach out to anyone in the BP community and see if I can get some advantages/disadvantages when it comes to FHA 203(k) loans. I understand bits and pieces when it comes to these "K" loans, however, I am looking to lean towards someone who has a broader understanding on this subject.

Any feedback would be greatly appreciated! 

Best of luck and HAPPY HOLIDAYS! 




One of the cons with any FHA mortgage is the permanent PMI on the loan. I think the Fannie May HomeStyle Renovation loan is a superior product. Maybe @Upen Patel , who is a mortgage broker has some insight as well.

@Justin Peters  FHA 203(k) loan is like any other FHA loan. It requires a min 1 yrs OO, min 3.5% down and have a monthly MI.

With regards to the FHA 203(k):
Pros: You can roll rehab costs into the loan, up to 50% of the purchase value. If the rehab loan is <=$35K, then its a streamline loan, which is a bit easier to work with.

Cons: You, your lender and contractor have to be well organized. ALL the work that you want to be paid by the loan has to be done by a contractor. If it a standard loan then you will need a GC and also a HUD consultant. Streamline loan allows you to select individual tradesman, and NO HUD consultant.

So the con is more from the perspective of how a rehab loan works. You will face these cons with ALL rehab loans.