Renovation
- Home
- Loan Options
- Renovation
- FHA Reno
FHA Renovation Loan
FHA 203(k) renovation loans—backed by the Federal Housing Administration—let you finance both the purchase (or refinance) of a home and its repairs/renovations in a single mortgage. The loan amount is typically based on the property’s estimated value after improvements (“after-improved value”). There are two main types: Limited (Streamline) for minor/cosmetic work (up to $75,000) and Standard for major/structural projects (minimum $5,000 in repairs, no upper limit beyond FHA county loan caps).
These are especially popular for fixer-uppers, as they’re more accessible than conventional options like Fannie Mae HomeStyle or Freddie Mac CHOICERenovation, particularly for borrowers with lower credit or smaller down payments.
Reasons to choose a FHA renovation loan
A FHA 203(k) renovation loan stands out because it rolls your home purchase (or refinance) and renovation expenses into one convenient mortgage—with just a 3.5% down payment and a single closing—so you can tackle fixer-uppers without draining your savings.
30-year 203(k) guidelines
To qualify for a 203(k) FHA reno loan, you will need:
Apply for a FHA 203k mortgage
Limited 203(k) (Streamline): For minor, non-structural repairs/improvements (e.g., painting, flooring, appliances, windows, minor plumbing/electrical, energy upgrades). Max renovation cost: $75,000 (updated in late 2024). No minimum required. Simpler process—no mandatory FHA consultant.
Standard 203(k) (Full): For major/structural work (e.g., roof/foundation fixes, additions, full remodels, accessibility mods, or even rebuilding if foundation remains). Minimum renovation cost: $5,000. No strict max (tied to FHA loan limits and after-improved value). Requires an FHA-approved 203(k) consultant for oversight.
On a typical FHA purchase or refinance, Scout Advisors can close in as little as 14 days. With a renovation loan, we suggest a minimum of 45 days (60 days is ideal) to allow sufficient time to shop contractors and to obtain renovation approval.
Typically work should be completed within 6 to 12 months from closing: Up to 12 months for Standard and 9 months for limited.
Eligible improvements are for the healthy & safety, kitchens, baths, additions, etc. Cannot be used for luxury items (hot tubs, pools, etc).
Generally no—must use licensed contractors (FHA-approved where required). Limited DIY may be allowed for very minor items in some cases, but most work requires professionals. No full owner-builder labor credit for the loan
