FHA 203(k) Standard Renovation Refinance
Best For: Limited Equity, Low Down Payments, Home Renovations
The FHA 203(k) Standard allows borrowers to refinance and include for the cost of renovations in the loan, with as little as 2.25% equity in the home.
Program Description
The FHA 203(k) loan is a government-insured loan that includes additional funds for renovations and repairs. The FHA 203(k) Standard Refinance requires a minimum of $5,000 in repairs and up to 110% of the property’s future value or the home price plus renovation costs, whichever is less. Using the 203(k) Standard also requires the renovation process to be overseen by a HUD consultant.
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FHA 203(k) Standard Renovation Refinance
Min. Credit Score
620
Min. Equity
2.25%
Max Loan Amount
$472,030 - $1,089,300
Qualification variables shown here are for 1-Unit Primary Residences, and loan amount ranges vary based on US County. Register Now to see if this loan program is a good fit for you, find your county limits, and find more options for purchasing a home.
Pros & Cons
- Low minimum credit score (620)
- Low retained equity requirement (2.25%)
- No income limits
- Avoid using savings or having to obtain a 2nd mortgage for renovation costs
- Easier to qualify for than HomeStyle® or CHOICER® options
- Only eligible for primary residences
- Mortgage Insurance Premium (MIP) required (can be rolled into the loan)
- Do it yourself (DIY) work not allowed
- More paperwork involved as compared to other loan options.
Renovation Loan Analysis
Up to 50% of price or value
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Your Estimated Renovation Fund
Renovation loans allow you to finance the cost of repairs and modifications into your home purchase or refinance. By registering for a free account , you can get a better idea of how much you could finance for renovating a home.
Program Availability
FHA 203(k) Standard Renovation Refinances are available in all 50 states, Washington D.C., Puerto Rico, and the U.S. Virgin Islands.
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“Applying for a 203(k) loan first requires you to find an FHA-approved lender. It's immensely crucial that you put your trust into a lender that has proven experience in handling renovation loans. There are a lot of moving pieces!"
Occupancy & Property Types
Qualification factors for this program can vary based on how you intend to occupy the property and what type of property you are purchasing. By registering for a free account , you can check program limits for all property and occupancy types.
Occupancy Types
Available Property Types for Primary Residence
Income & Purchase Price Limits
Your Debt-to-Income Ratio (DTI), as well as purchase price and income limits, are important factors when qualifying for a home loan program. By registering for a free account , you can find the exact program limits for this program and others in your area and for your unique scenario.
Debt-to-Income Limit
43.00%
Purchase Price Limit
No Limits
Income Limit
No Limits
Qualification variables shown here are for 1-Unit Primary Residences, and loan limit ranges vary based on US County. Amounts may be rounded. Exact amounts can be accessed by registering for a free account.
Refinancing?
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Key Features
- Ability to make significant structural alterations
- Modernization and improvements to the home's function
- Requires a minimum of $5,000 in needed renovations
Additional Conditions
- Credit score: You’ll need a credit score of at least 620 to qualify for an FHA 203(k) loan, though some lenders may have a higher minimum
- Retained equity: For a 203(k) refinance loan, 2.25% retained equity in the property is required
- Max loan amount: FHA loan limits vary depending on where you live, but are generally capped at $472,030 in low-cost counties and $1,089,300 in high-cost counties
Other Limitations
In some circumstances, there are specific requirements you must meet or homebuyer education courses you must attend in order to be eligible for the loan program.
No other program limitations
A Homebuyer Education Class is not required for this loan program.
Mortgage Insurance & Fees
Most mortgage programs require mortgage insurance when you are financing more than 80% of the purchase price or appraised value. Some programs may also have an associated funding fee, paid at the time of closing, or an annual fee. Learn all about the different fees here.
Required On All FHA Loans
Type: Annual Mortgage Insurance Premium (MIP)This FHA program requires the Annual Mortgage Insurance Premium (MIP) regardless of the amount of your down payment or home equity.
Type: FHA UFMIP
The FHA Up Front Mortgage Insurance Premium (UFMIP) is a one-time fee equal to 1.75% of your loan amount. This fee can either be paid at closing or financed into your loan amount.
Type: No Annual Fee
This program does not have an annual fee.
Estimated Closing Costs: 2%
These amounts are just an estimate. Your closing costs include things like loan origination fees, discount points, appraisal fees, title insurance, taxes, deed recording fees, and other charges.
Similar Loan Programs
If you think this home loan program may be a good fit for you, you may also want to check out the following programs that share many similarities with the current program.
FHA 203(k) Limited Renovation Refinance
Best For: Limited Equity, Low Credit Scores, Home Renovations
A government-insured loan program that provides up to $35,000 for minor remodeling and non-structural repairs.
FHA High-Balance Rate-and-Term Refinance
Best For: Large Loan Amounts, Easy Qualification
FHA refinancing above the standard FHA loan limit in high cost counties with easier qualification and typically lower rates than conventional.
Related Resources
2023 Cash-Out Refinance Guide
Owning a home is a big investment and like with many long-term assets, it comes with a few added responsibilities. To keep your home appreciating in value and to make sure you continue to enjoy it, it's important to keep it maintained and updated.
Read More
A Rundown On Closing Costs and How They Affect You
It can be tricky to sift through all the figures , so we broke down what they are, how much they cost, who's responsible and how to minimize your expenses.
Read More
Mortgage Insurance Premium – MIP – Explained
Are you scratching your head, wondering what mortgage insurance is and why it's adding to your expenses? It's confusing, to be sure. If you're taking out a Federal Housing Administration (FHA) loan, chances are you'll need a mortgage insurance premium (MIP) to be set up. Also known as FHA mortgage insurance, it works to protect the lender from these higher-risk loans. As you learn how to buy a house, you may encounter these home loans, which typically have a lower interest rate and easier qualifications. Even with the requirement for MIP, FHA loans could still benefit you.
Read MoreVisit our Mortgage Education Center for more resources.
* Some loan programs may not be offered by all featured lenders of ReviewMyMortgage.com and qualification guidelines may vary between them. Our team makes their best effort to keep loan program information up to date. Loan programs may change without warning. ReviewMyMortgage.com does not guarantee or offer any loan products. ReviewMyMortgage.com is strictly an educational resource hub for consumers
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