Prepping for house hacking a duplex using 203k loan - Questions

[Heather Faggiano]

I'm planning to purchase my very first property next year - a duplex - and plan to house hack using a 203k loan. For now I'm doing tons of research, and getting my finances and DTI in line. In the meantime, I have a few questions I'm hoping to get answered:

1. When should I start speaking with an agent? I currently have an apartment lease that is up end of August 2026. I'd like to avoid going m2m on this lease, so I'm trying to understand when to start the process with an agent/lender/contractor, etc. 

2. With a 203k loan, renovations must be completed within 6 months (I plan to use a limited 203k). This won't be an issue for the side that I'll be living in, but how would I renovate the tenant-occupied side within those same 6 months IF their lease goes for another 10 months for example? Logistically, what would you do in this instance?

3. Can I pick and choose what renovations I want to use the 203k loan for? For example, can I paint and tackle other smaller projects myself and only use the loan for larger, more in depth projects that I don't feel comfortable doing myself? Or, am I required to use the loan for all renovations and updates?

Thanks very much for your insight!

[Rick Albert]

Hey Heather,

I did the extensive FHA 203(k) loan for my second house hack. Here are a few answers to your questions:

1. You can start talking to an agent now just to get the lay of the land. The market may change but this way you can ask questions. I've had clients talk to me for two years before buying. You can also have the agent set you up on automated listing alerts so you can study the market yourself.

2. If there is a tenant in place, then why do any renovations other than health and safety? It's not like they will pay you more for the space. Wait until they move out and then do the renovations. Otherwise you are putting in new finishes that are getting used for no additional income.

3. You can outside of health and safety. So if there is a failing roof, the lender will likely want you to replace it. If there are unpermitted structures, then the lender may want you to prioritize it. It's generally the cosmetic work that they are more flexible on.

@Matthew Porcaro is an expert in the FHA 203(k) space and knows his stuff.