FHA 203(k). Buy and fix in one loan.

Limited 203(k) is for cosmetic and non-structural work — kitchens, baths, flooring, paint, fixtures, mechanical replacements. Capped at $75,000 in renovation costs. No HUD consultant required. One contractor, up to two draws.

Standard 203(k) handles structural work — additions, foundation repair, load-bearing walls, full gut rehabs. No specific dollar cap below FHA county loan limits. Requires a HUD-approved consultant who inspects the property, validates the bid, and approves each draw. Five draws maximum.

The choice point: does your project move walls, change footprint, or address structural/safety hazards? If yes — Standard. If no — Limited. See the full breakdown in 203(k) explained.

3.5% of the total loan amount (purchase price + renovation cost + financeable closing costs + UFMIP) for credit scores 580+. With FICO 500–579, the down payment jumps to 10%.

On a $400,000 home with $50,000 in repairs, you're looking at roughly $15,750 minimum down at 3.5% — substantially less than the cash you'd need for a non-FHA renovation loan.

Gift funds and down payment assistance are allowed and stack with 203(k). Your LO will walk you through eligible DPA programs in your state.

No. FHA 203(k) requires a licensed, insured general contractor. Self-performing work — even by skilled tradespeople — disqualifies the loan.

The intent is fast completion (within 6 months) with verifiable workmanship. The contractor packet — license, insurance, bid, references — is a hard requirement. If saving on labor is critical to your project math, 203(k) probably isn't the right tool. Our contractor tips guide shows what a strong packet looks like.

Typically 0.50–1.00 percentage points higher than a non-renovation FHA mortgage. The premium reflects added complexity and risk during the construction phase.

Once renovation is complete, the rate doesn't reset — it's locked for the life of the loan. The premium is a fixed cost of using the program, paid out monthly forever, but the trade-off is access to fixer properties at 15–30% below move-in-ready comps.

45–60 days from offer to closing (vs. ~30 for standard FHA), then up to 6 months of construction with a possible 6-month extension.

Phase by phase: contractor selection + bid 2 weeks, appraisal + underwriting 2–3 weeks, closing 1 week. After close: 30 days max to start work, then construction proceeds in milestone-based draws.

The biggest delays come from incomplete contractor packets and long lead-time materials (cabinets, custom windows). Both are avoidable with planning — see our renovation timeline.

Yes. All FHA loans carry upfront MIP of 1.75% (financed into the loan) and annual MIP of 0.55% (paid monthly).

With less than 10% down, MIP is permanent — it doesn't cancel automatically when you reach 22% equity. The standard exit is to refinance to a conventional loan once you've built enough equity (typically 5–7 years post-renovation).

The post-renovation appraisal often jumps your home value 15–25%, accelerating equity build vs. traditional purchases.

Standard 203(k), yes — if it's attached or qualifies as part of the primary residence's structure. Detached ADU construction is increasingly allowed under recent FHA policy updates, with documentation requirements.

Limited 203(k) does not allow new ADU construction — only repairs to existing structures.

Loan officer to confirm county and lender-specific specifics before you write the offer.

10–20% of the renovation budget, automatically built into the loan to cover surprises during demo — old wiring, rotten subfloor, plumbing not to code, asbestos under the linoleum.

Change orders during construction get processed against contingency first. Unused contingency at the end doesn't come back as cash — it pays down your loan principal, reducing your starting balance.

On a $50K reno with 15% contingency, you could see $7,500 shaved off your loan if the project comes in clean. Free principal reduction is rare in home finance.