The FHA 203(k) Rehabilitation Mortgage Insurance Program allows you to purchase or refinance a home that needs repairs and finance the renovation costs into one single mortgage. No second loan, no double closing, no separate construction financing required.
| Feature | Limited 203(k) | Standard 203(k) |
|---|---|---|
| Repair limit | Up to $75,000 (Mortgagee Letter 2024-13) | Minimum $5,000 – no upper limit |
| Structural work allowed | Limited / non-structural | Full structural repairs & additions |
| Consultant required | Often (for complex cases) | Always required |
| Best for | Cosmetic updates, systems upgrades | Major rehabs, gut jobs, additions |
Pros: One loan, one closing, often lower rates than traditional construction loans.
Cons: More paperwork, required consultant on Standard loans, repair funds held in
escrow until work is verified complete.