203k Limited

If you’ve been avoiding purchasing a home because you don’t have the cash for upgrades or renovation repairs, the Federal Housing Administration (FHA) has a loan program just for you. The 203(k) Limited and standard FHA 203(k) Consultant Loan eliminates the need for large out-of-pocket renovation cost that can drain your savings. With these loans you can simplify the financing process by financing your home and your renovation cost into one loan. Whether you’re repairing your current home or purchasing a fixer-upper, you should consider applying for either a Limited 203(k) or Standard loan. Keep reading to learn more about the specifications of these loans.

But first, we want to thank you for considering New Concept Home Buying. We are a team of realtors, designers, and contractors in the Denver area who specialize in working with home buyers using the 203(k) loan. We will help you find a neighborhood you love, discover a home with loads of potential, and then help you design the final product. You can work with our recommended contractors or one of your own to carry out repairs, renovations, and upgrades, drastically increasing the value of your home in a short amount of time without having to drain your savings account. No hassle, no stress. You can learn more about our home buying program here!


FHA Consultant Loan

When it comes to choosing the best FHA 203(k) loan for you and your home, there’s a lot to think about. How much will the repairs be? Who will be performing the work? How many times can I draw money? Are the home improvement projects I have in mind eligible? Before making a final decision, use the below chart to decide which home improvement loan is right for you. As you read through this information, feel free to reach out to your real estate agent if you have any questions.


What is an FHA 203(k) Consultant Loan?

Typically reserved for homes requiring more than $35,000 in repairs, the Consultant K home loan is usually used for homes with more extensive work to be done. In order to apply for the loan, there must be at least $5,000 worth of repairs, and loan limits are based on property type and location. Since the Consultant K allows for more extensive work, more supervision is required throughout the process. Below is just a sample of eligible repairs with a 203(k) Consultant Loan.

A good way to understand if a Consultant K loan is the right choice is to ask yourself, “Am I updating a necessity, or am I adding a luxury?”

Eligible:

Full kitchen or bathroom remodel
Garage (attached/detached/new)
Structural alterations and additions
Major landscaping/decks/fencing
Permanent improvements to the house

Ineligible:

New tennis court
Gazebo or bathhouse
Additions or alterations for commercial use
Photo mural
New swimming pool


What is an FHA Limited 203(k) (formerly known as Streamline k) Loan?

Designed specifically for outdated homes that may need cosmetic repairs or upgrades to reach their full potential, the Limited 203(k) Loan is intended for homes that can be remodeled, repaired, or updated to their full potential for less than $35,000. As long as the intended repairs don’t exceed that amount, you may be eligible for an FHA Limited 203(k). Before considering applying for a Limited 203(k) Loan, here is a sample of some projects that are eligible. Of course, these are only examples and this is not a comprehensive list. Give us a call if you have any questions about if you might be eligible for this loan!

Eligible:

Minor kitchen remodeling which does not involve structural repairs
Interior and exterior painting
Repair/replacement/upgrade of appliances
Window and door replacements
Replace/repair roof, gutters and downspouts

Ineligible:

Major rehabilitation or major remodeling
New construction, including room addition
Repairs of structural damage
Landscaping or similar site amenity improvements
Any repair requiring a work schedule greater than 6 months