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What is a 203K FHA Loan?

April 26, 2017FHA loan

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What is a 203K FHA Loan?

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This is a loan that enables the home buyer to finance both the purchase and rehabilitation of a home through a single mortgage. A portion of the loan is used to pay off the seller’s existing mortgage and the remainder is placed in an escrow account and released as rehabilitation is completed. The home must be at least one year old. The cost of rehabilitation must be at least $5,000, but the total property value (including the cost of repairs) must fall within the FHA maximum mortgage limit.