FHA 203k loan

Invest in a better future with a home improvement loan.

Get a deal when buying an older home that needs some work.

Finance the purchase and renovation costs through a single mortgage.

Build home equity quickly.

Repairs FHA 203k

Buy an older home that needs work rather than a newer, more expensive one. Make simple cosmetic repairs or pull off a major structural renovation.

Install new flooring, remodel the kitchen, or fix the gutters.
Add a room, repair the roof, and replace the plumbing.
No dollar limit for the repairs as long as your loan amount isn’t more than the FHA limit.

FHA 203k step-by-step

Everything you need to know to make it happen

Get pre-approved.
Find a home.
Choose a contractor.
Accept the final loan approval.
Close on the purchase.
Complete the repairs.
Move in.

Find out how to buy a home and fix it with an FHA 203(K) mortgage. Get a free copy of our step-by-step guide that breaks it down, making the FHA 203k loan easy to understand.

Talk to an expert.

Ask questions, get straight answers, and find out how to start on your home loan.

FHA 203k loan requirements

Mortgages don’t have to feel so complicated. Get started by looking over a few of the loan program rules.

FHA 203k maximum loan amount

Borrow up to 110% of the home’s future value after completing the improvements.
Keep the amount within the FHA loan limits.
Receive up to $472,030 to buy and renovate a single-family, condominium, or townhome. Or take a larger loan for a multi-unit property.

Property type	FHA loan limits 2023
Single-family, condo, or townhome	$472,030
2-unit, multi-family home	$604,400
3-unit, multi-family home	$730,525
4-unit, multi-family home	$907,900

The FHA loan limits for 2023 apply to homebuyers in Illinois, Indiana, and Michigan.

FHA loan limits are higher in several counties in Florida and Tennessee.

Down payment for FHA 203k

Buy a 1-to-4-unit home with a down payment of only 3.5% of the purchase price. Homeownership can be surprisingly straightforward and affordable.

Property type	Minimum down payment as a percent of the purchase price
1-to-4 units: single-family, condo, townhome, or multi-famly home	3.5%

FHA mortgage insurance - How much is it? Can you cancel it?

Credit score for FHA 203k

Get the financing you need to buy and repair the home you want, even if you have a few bumps in your credit history.

Low credit score requirements - 620 or higher.
Short waiting period after a significant event such as bankruptcy.
Get approve when you have debts, like student loans, credit cards, and a car loan.

How a mortgage co-signer can help you buy a home
NewCastle Home Loans is a U.S. Department of Housing and Urban Development Approved Lending Institution, 2074900006.

Frequently asked questions about FHA 203k loans

Can I do the repairs myself with an FHA 203k loan?

No. Please choose a licensed contractor to complete all of the work.

Do FHA 203k loans cost more?

Yes. In addition to the typical closing costs for an FHA loan, expect to pay more for an appraisal report and extra fees for origination, inspections, title updates, and a HUD consultant. As a rule of thumb, the 203k fees should add up to about 1% of the loan amount. Contact us for a quote. After you apply, we will send you an official Loan Estimate.

Check out our Loan Estimate Explainer.

Can I use the 203k loan to buy and renovate a multi-family property?

Yes. You can use the FHA 203k loan to buy and repair a one-to-four unit, multi-family home. You must live in the property for at least one year

How much is FHA mortgage insurance?

Homebuyers pay two types of mortgage insurance when purchasing a home using an FHA loan: Upfront Mortgage Insurance Premium (UFMIP) & Monthly Mortgage Insurance Premium (MIP).

1.UFMIP is a one-time fee added to your loan amount. To calculate, multiply the loan amount by the UFMIP rate of 1.75% to get the UFMIP dollar amount. Then add the UFMIP to the base loan amount to the total loan amount.

For example, $100,000 Loan amount X 1.75% = $1,750 UFMIP + $100,000 Loan amount = $101,750 Total loan amount.

2.MIP is a recurring charge paid to the lender in monthly installments as part of your regular mortgage payments. The cost depends on the loan amount, down payment, and loan term.

To calculate, multiply the base loan amount by the MIP rate of 0.85% for a 30-year fixed-rate mortgage when your down payment is less than 5%. Then divide by 12.

For example, $100,000 Loan amount X 0.85% = $850 MIP ÷ 12 = $70.83 Monthly MIP.

Find details here: FHA mortgage insurance - How much is it? Can you cancel it?