Forgotten Your Password?

Need to Register?

FHA 203k Home Improvement Projects

By Michael Zuren, PhD Updated on 6/19/2017

fha 203k loan benefitsRecent data from the National Association of Realtors (NAR) show that within 90 days of buying a home, 53% percent of new homeowners begin a home improvement project. 37% also purchase new appliances.

While the idea of personalizing your home new improvements and new appliances is exciting, it does come at a cost. The additional financial obligations on top of the new mortgage payment can be too much for some, and that's why you may want to consider a 203k. The Federal Housing Administration’s (FHA) 203k or 203k Streamline rehabilitation loan is an alternative funding source for making home improvements or purchase new home appliances.

What is the FHA 203k loan?

The FHA 203k or 203k Streamline are loans designed to help fund your home repairs, improvements or appliances and is added the mortgage of your the property at the time of purchase. Financing the repairs and improvements at the initial time of purchase can potentially reduce your expense when compared to other forms of financing.  

The FHA 203k Streamline loan is meant only for home improvements and repairs that cost up to $35,000. The 203k Streamline is not intended for structural repairs and does not require a HUD-approved consultant to oversee the work. With this loan, you may submit a proposal from a licensed contractor for up to $35,000 for the improvements, repairs or appliances. However, it must also include contingency reserve.

Because the FHA 203k or 203k Streamline mortgages offer permanent financing, you only need one mortgage loan to finance both the purchase and the rehabilitation of your new home. 

The mortgage amount is based on the work being completed and the projected value of the property. 

The FHA 203k and the FHA 203k Streamline mortgage loans are calculated the same way, which is based on the rehabilitation costs and projected value of the property.

Eligible Improvements with a 203K Streamline Mortgage:

  • Remodeled kitchen and baths
  • Updated plumbing, heating, AC and electrical systems
  • Roofing, gutters, downspouts, and windows
  • Flooring, tiling, and carpeting
  • Energy conservation improvements
  • Improvements for accessibility
  • New free standing appliances
  • Lead-based paint stabilization or abatement of lead-based paint hazards

All health, safety, and energy conservation items should be discussed before completing any general home improvements, and luxury improvements are not eligible. And remember that construction or additions can only be financed under the full 203K program (refer to for details).


National Association of Realtors© (2013). Home Features Survey


About The Author:
Michael Zuren, PhD
I have 25 years experience in the mortgage banking industry. My experience includes the following loan types: (1) HomePath, (2) OHFA, (3) FHA 203k, (4) VA, and (5) USDA financing. I have been serving Cuyahoga, Lake, Geauga, and Ashtabula counties in Northern Ohio... more

Didn't find the answer you wanted? Ask one of your own.

Get an answer

Related Articles

Subscribe to our news feed.