Updated about 4 years ago on . Most recent reply

Funding duplex ADU conversion w FHA 203k?
Hello! I'm new to this and have been learning a lot here. I'm looking for a little clarity if anyone can help.
Ideally I'm looking for a duplex with a separate garage I can convert to an ADU. Does anyone know if it's possible to fund this with a FHA 203k loan? Also looking for a good lending company that is familiar with doing 203k loans in LA. I was working with a lender, but they have gone silent on me when I asked about the 203k loans so it's not a very good sign.
Thanks
Most Popular Reply

The FHA max loan limits includes the purchase price + rehab costs + soft costs. So, that's the total max loan you can go up to.
The total amount you will borrow will be the purchase price + rehab costs + soft costs.
Everything based on the total number of units AFTER the rehab is complete. So, if you are buying a duplex (2 unit) and will end up with duplex + ADU (3 units), then the max loan is based on the 3 unit limit.
You can even use 75% of the market rent for the units that you will not occupy as your primary residence to help qualify for the mortgage if you need it.