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FHA 203k loan

Invest in a better future with a home improvement loan.

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Get a deal when buying an older home that needs some work.
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Finance the purchase and renovation costs through a single mortgage.
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  • 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.

How does the FHA 203k loan work? 

An FHA 203k loan is a type of mortgage designed to help homebuyers purchase a property and finance repairs and improvements into a single mortgage. With the 203k loan, you can buy a home now and fix it after closing. Here are five steps explaining how.

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Get pre-approved for an FHA 203k loan.

Getting pre-approved for a 203k loan is a critical first step.

  • Confirm eligibility: Feel confident about buying and renovating a home.
  • Set a realistic budget: Determine how much you can borrow.
  • Boost bargaining power: Increase the likelihood of getting a deal on a fixer-upper.


Use an FHA 203k experienced lender.

Get a verified mortgage pre-approval letter.

Find the right home to buy and fix up.

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Plan your 203k renovation project.

NewCastle Home Loans will help you plan for a successful project to ensure your vision becomes a reality. Start by choosing the 203k loan type. There are two types of 203k loans: 

  • Limited 203k - For minor repairs costing $35,000 or less. This option offers a straightforward loan process with less paperwork.
  • Standard 203k - For significant renovations costing more than $35,000 and requiring structural repairs. It may involve more documentation and oversight.

Get contractor bids.

Meet with a 203k consultant.

Inspect the property.

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Receive final loan approval.

The final loan approval assures that your financing is in place. It means the lender reviewed your financial information, renovation plans, FHA appraisal, and necessary paperwork for the 203k loan and will lend you the money to buy and repair the home. 

Order the FHA 203k appraisal.

Complete the FHA 203k paperwork.

Prepare for the closing.

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Close the purchase.

At closing, you typically meet with your real estate attorney at a title company to sign legal documents, pay the seller, and take ownership of the property.

  • At closing: Use part of the loan to purchase the property from the seller. The lender holds the portion of the loan you will use for renovations in an escrow account.

  • After closing: The lender releases the renovation funds to your general contractor, typically in stages, as the work progresses.

Initial draw at closing

203k Lender Repair Escrow

203k Contingency Reserve

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Complete the repairs. 

After closing, the contractor can start your home improvement project as outlined in your FHA 203k plan. The lender may ask the 203k consultant or real estate appraiser to inspect the property to verify that the contractor completed the repairs accordingly.

Draws and inspections

Finish the project.

Complete the final inspection.

Find out how to buy and fix a home with an FHA 203k mortgage.

Get a free copy of our step-by-step guide that breaks it down, making the FHA 203k loan easy to understand.

Get you free guide now

Talk to an expert.

Ask questions, get straight answers, and find out how to start on your home loan.
Customer 1 Jim Quist
  • 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 $498,257 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 2024
Single-family, condo, or townhome
2-unit, multi-family home
3-unit, multi-family home
4-unit, multi-family home
Property type Minimum down payment as a percent of the purchase price
1-to-4 units: single-family, condo, townhome, or multi-famly home

Frequently asked questions about FHA 203k loans

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

Do FHA 203k loans cost more?

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

How much is FHA mortgage insurance?

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Get pre-approved for a mortgage.

A powerful pre-approval letter, signed by an underwriter, improves your chances of winning the deal.