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  - 203K Guide 101

Apply for a 203k home repair loan

 Determining the Maximum Loan Amount

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Determining the Maximum Loan Amount



Based on the lesser of one of the following scenarios:

  1. The existing debt on the property before rehabilitation, plus the estimated cost of the rehabilitation and allowable closing costs.

  2. The As-Is Value plus rehabilitation costs.

  3. 110% of the After-Improved Value multiplied by 97.75%(LTV factor).



The maximum mortgage amount is based on the lesser of one of the options below multiplied by 96.5%(LTV factor).

  1. The As-Is-Value or the purchase price of the property before rehabilitation (whichever is less) plus the estimated cost of the rehabilitation.

  2. 110% of the After-Improved Value of the property.

203k maximum loan amount
  203k maximum loan amount
Cannot exceed 110% of the after improved value.

Closing costs and prepaids can be financed on a refinance transaction if equity is available.

  Cannot exceed 110% of the after improved value.

NOTE: If the property was owned less than a year, the acquisition cost plus the documented rehabilitation costs must be used.

Completing Your Application
In addition to the typical FHA initial disclosure package, the borrower must execute the following disclosures specific to the 203(k) program:

  • 203(k) Borrower's Acknowledgement
    Borrower's Identity of Interest
NOTE: FHA 203(k) loans have a longer closing period. These loans usually take 60 to 90 days to close, compared to 30 to 45 days for regular FHA loans.

203(k) Rehab Guide Quick Jump

203(k) Rehab Loan FAQs


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