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How Do Borrowers Benefit From the FHA 203k?

Closing of Poirer Project

There is so much to be gained by borrowers/prospective home buyers by utilizing the FHA 203k program. While it is not the program for everyone, it is something that should be offered and considered when purchasing and refinancing a home.

Here are the top 10 benefits of the FHA 203k for borrowers:

    1. Little or no additional out of pocket expense
    2. 3.5% down payment (based on loan + renovation costs)
    3. As low as 640 credit score and up 50% DTI (debt-to-income)
    4. Can be utilized for both purchase or refinance transactions
    5. 110% of improved appraised value
    6. 6 months of mortgage payments can be included in 203k loan (Standard/full only)
    7. Can buy any residential property in almost any condition
    8. Select improvements to suit their own style
    9. Larger selection of homes to choose from
    10. The contingency reserve protects from against unforeseen changes

Additionally, here are a few benefits specific to either purchase or refinance transactions:


    1. Perfect for HUD REOs, foreclosures, and short sales
    2. Improvements to out-dated homes, kitchens, bathrooms, septic systems, etc.
    3. Structural deficiencies (termite damage)
    4. Additions and expansions


    1. The ability to improve your home instead of moving
    2. Necessary or optional major/structural repairs
    3. Build the house of your dreams!


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