What makes the 203k Program different? 

BEFORE the 203k Program existed:  If a buyer wanted to renovate a house, the buyer would typically have to take out a loan to purchase the house “as-is”; then obtain another loan for the cost of the renovations.  Finally, after all renovations and repairs were completed, the buyer would obtain a permanent, long term mortgage to pay off the previous loans.  This was tedious, time consuming and cost money. 

AFTER the 203k Program became available:  If a buyer wants to renovate a house, the buyer can obtain one loan for both the acquisition and renovations of the residence.  The loan amount is based on the projected value of the house after renovations and takes into consideration the cost of necessary repairs and desired renovations.  

What are the benefits of the 203k Program? 

Three of the biggest benefits are… 

• The 203k Program allows the buyer to obtain one loan for both the acquisition and cost of repairs of a house. 

• The 203k Program also allows homebuyers to comfortably expand their search for homes beyond ones that are “move-in” ready.

• The 203k Program makes it easier for a NON-handyman to purchase a “fixer-upper” and turn it into a dream home.  

What does the typical 203k process look like? 

In its simplest form, the 203k process is as follows:

• The home buyer qualifies for a loan with a 203k lender.
• The buyer finds a house and determines if the purchase price plus the cost of repairs is less than (or equal to) the appraised value (after repairs). A 203k Consultant can complete a Feasibility Analysis to help with this.
• The buyer executes a sales contract contingent upon meeting 203k program and lender requirements.
• The 203k Consultant completes a proposal of the necessary and desired repairs so the buyer’s contractor can determine the cost. 
• An appraisal is completed, the loan is processed and, assuming all lender requirements are met, the loan closes.
• Mortgage payments and renovations begin.

For more information, HUD has additional webpages outlining the program’s details and more frequently asked questions: 

 Rehab a Home w. HUD's 203(k)

The services of a HUD approved 203k Consultant are necessary in the majority of 203k loans.  As a HUD approved 203k Consultant, we work closely with all involved parties to make certain required procedures and documentations are completed correctly and help make sure the process runs smoothly.