FHA 203K Standard Renovation Loan

The full 203K Standard Renovation Mortgage loan allows all of the FHA 203K Streamline eligible items plus the second section of items listed.  The full FHA 203K Standard Renovation mortgage loan is normally for repairs greater than $35,000 total.

Eligible Improvements for FHA 203K Loan

  • Repair/Replacement of roofs, gutters and downspouts.
  • Repair/Replacement/upgrade of existing HVAC systems.
  • Repair/Replacement/upgrade of plumbing and electrical systems.
  • Repair/Replacement of existing flooring.
  • Minor remodeling (such as kitchens), which does not involve structural repairs.   
  • Weatherization such as: storm windows and doors, insulation, weather stripping
  • Appliances - Purchase and installation of appliances include free-standing ranges, refrigerators, washers/dryers, dishwashers, microwave ovens.
  • Improvements for accessibility for persons with disabilities.
  • Painting; both exterior, and interior.
  • Lead-based paint stabilization or abatement of lead-based paint hazards.
  • Repair/Replacement/Add exterior decks, patios, porches.
  • Basement finishing and remodeling, which does not involve structural repairs.
  • Basement waterproofing.
  • Window and door replacements.
  • Exterior wall re-siding.
  • Septic system and/or well repair or replacement.

FHA 203K Standard Eligible over 203K Streamline loans

  • There is a minimum $5,000 requirement for Home Improvements on the existing structure.  There is no maximum amount of home improvements
  • Luxury items and improvements that do not become a permanent part of the real property are still not eligible as cost rehabilitation. An exception to this requirement is new major appliances, which are allowed; such as, refrigerator, stove, washer, and dryer.
  • The program can be used to finance items such as, painting, room additions, decks and other items even if the home does not need any other improvements.
  • All health, safety and energy conservation items must be addressed prior to completing general home improvements. The work write-up must demonstrate that, when the rehabilitation is completed, the property will meet HUD’s minimum property standards.
  • Structural alterations and reconstruction (repair or replacement of structural damage, chimney repair, additions to the structure, installation of an additional bath(s), skylights, finished attics  and/or basements, repair of termite damage and the treatment against termites or other insect infestation).
  • Changes for improved functions and modernization (remodeled bathrooms and kitchens, including permanently installed appliances; such as, built-in range and/or oven, range hood, microwave, dishwasher).
  • Elimination of health and safety hazards (including the resolution of defective paint surfaces or lead-based paint problems on homes built prior to 1978).
  • Changes for aesthetic appeal and elimination of obsolescence (new exterior siding, adding a second story to the home, covered porch, stair railings, attached carport).
  • Reconditioning or replacement of plumbing (including connection to public water and/or sewer systems), healing, air conditioning and electrical systems.
  • Installation of new plumbing fixtures is acceptable, including interior whirlpool bathtubs.
  • Roofing, gutters, and downspouts.
  • Flooring, tiling and carpeting only if it is deteriorated (stains, patches showing extreme wear, or missing pieces). Deteriorated does not include the color or style of the flooring, tiling, or carpeting. Replacement of flooring for cosmetic reasons is acceptable in the first $5,000 of repairs if all health, safety and energy conservation items have been addressed.
  • Installation of well and/or septic system. The well or septic system must be installed or repaired prior to beginning any other repairs to the property. The following properties are not eligible for 203(k) insured financing due to well/septic REPAIR requirements: A property less than 1/2 acre with a separate well or septic system which requires repairs is not acceptable; and A property less than one acre with both a well and a septic system where either requires repair is unacceptable.
  • Energy conservation improvements (new double pane windows, steel insulated exterior doors, insulation, solar domestic hot water systems, caulking and weather-stripping). Heat loss/gain calculations are not required when installing a new heating or cooling system.
  • Major landscape work and site improvement patios, decks and terraces that improve the value of the property equal to the dollar amount spent on the improvements or required to preserve the property from erosion. The correction of grading ad drainage is also acceptable. Tree removal is acceptable if the tree is a safety hazard to the property. Repair of existing walks and driveway is acceptable if it may affect the safety of the property.
  • Improvements for accessibility to the handicapped (remodeling kitchens and baths for wheelchair access, lowering kitchen cabinets, installing wider door and exterior ramps).

Ineligible Improvements

Luxury items and improvements that do not become a permanent part of the real properly are not eligible as a cost of rehabilitation.  Ineligible improvements for purchase or repair include, but are not limited to, the following:

  • Barbecue pit
  • Bathhouse
  • Dumbwaiter
  • Exterior hot tub, sauna, spa and whirlpool bath
  • Outdoor fireplace or hearth
  • Photo mural
  • Installation of a new swimming pool
  • Gazebo, television antenna, satellite dish
  • Tennis court
  • Tree surgery (unless a health and safety requirement)
  • Additions or alterations to provide for commercial use