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!

[Jonathan Klemm]

Congrats on your upcoming property purchase @Heather Faggiano!  House hacking and using the 203k with 3.5% down is by far the most amazing way to grow your net worth and get into the real estate game!

1.  Is there any chance you could purchase sooner?  Do you have the downpayment?  If so, I'd start talking to an agent and end your lease.

2.  6 months got updated to 9 months for the limited 203k loan.  Although many lenders just want an update.  Oftentimes, here in Chicago if permits are required they can delay the actual process for a while.  Don't renovate the tenant side or find a property where the tenant is month to month or maybe check with the tenant and see if they would trade sides once you are done with the first side.

3. Generally speaking yes. FHA will require certain items to be fixed no matter what. Usually they are looking at safe, sanitary, and secure items. Otherwise, the limited 203k does have things you can't do, like moving walls, adding units, etc. but for the most part you should be able to do what you want. If you Google limited 203k restrictions, you will find a list of things you can't do.