FHA 203k Loans - Eligible
FHA 203k Eligilble Properties
To be eligible for the FHA 203k mortgage loan, the property must be a one-to-four family dwelling that has been
completed for at least one year prior to the loan application date. The number of units on the site must be
acceptable according to local zoning requirements. All newly constructed units must be attached to the existing
dwelling. Cooperative units are not eligible.
Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some
of the existing foundation system remains in place.
In addition to typical home improvement loan projects, the FHA 203k mortgage loan program can be used to convert
a one-family dwelling to a two-, three-, or four-family dwelling. An existing multi-unit dwelling could be
decreased to a one- to four-family unit.
An existing house (or modular unit) on another site can be moved onto the mortgaged property; however, release
of loan proceeds for the existing structure on the non-mortgaged property is not allowed until the new foundation
has been properly inspected and the dwelling has been properly placed and secured to the new foundation.
A 203k mortgage loan may be originated on a "mixed use" residential property provided: (1) The property has no
greater than 25 percent (for a one story building); 33 percent (for a three story building); and 49 percent (for a
two story building) of its floor area used for commercial (storefront) purposes; (2) the commercial use will not
affect the health and safety of the occupants of the residential property; and (3) the rehabilitation funds will
only be used for the residential functions of the dwelling and areas used to access the residential part of the
While these are the general guidelines, not all lenders will fund 203-k loans. Even if they do, they may be more
restrictive on their guidelines. Apply for you FHA 203k Loan Today
What is the minimum amount of repairs required on a FHA 203k home improvement loan?
There is a minimum $5,000 requirement of eligible home improvement loan projects on the existing structure of
the property. Minor or cosmetic repairs may be included after meeting the first $5,000 worth of repairs.
What are some of the repairs on and FHA 203k loan that qualify for the first $5,000?
- Structural alterations and reconstruction: (Repair or replacement of structural damage, chimney repair,
additions to the structure, installation of additional bath(s), skylights, finished attics and/or basements,
repair of termite damage and the treatment against termites)
- Elimination of health and safety hazards.
- Changes for aesthetic appeal:
(New siding, adding a dormer, covered porch, attached garage).
- Air Conditioning or replacement:
(plumbing, heating, air conditioning and electrical systems).
- Installation of well, septic system or connection to public utilities.
- Roofing, Gutter Downspouts, Flooring, Tiling and carpeting.
- Major landscape and site improvement.
- Improvements to improve accessibility and functions for the disabled.