What is the 203(k) Program?
The Section 203(k) loan program is HUD’s primary program for the rehabilitation and repair of single family properties. These loans are provided through HUD-approved mortgage lenders nationwide and insured by FHA, which is part of HUD. These loans are beneficial for families since the loan down payment can be as little as 3.5% given the property must be used as a principal residence. This program allows you to roll the rehab and repair cost directly into your mortgage and turn your “fixer upper” into a DREAM HOME.
For addtional information you can visit the Rehab a Home w/HUD's 203(k) (Homes & Communities, U.S. Department of Housing and Urban Development website)
Streamline (k) Repair Program
The Streamline (k) program is a modification of the 203(k) program to facilitate purchase transactions in which the property needs minor rehabilitation work, as identified in a pre-purchase home inspection or the FHA appraisal. FHA's Streamline 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this program, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector, FHA appraiser, or contractor. Both the Standard 203(k) and the Streamline (k) programs can be used in conjunction with refinancing of an existing home.
203(k) Experts
 When you are building a team, you look for the strongest, most knowledgeable players who will compliment your best player. Moveout Makeovers has assembled a team of experts in construction, real estate sales and interior design. They are all ready to assist you in adding the best value to your new home. In addition, we have teamed with lending experts who specialize in the FHA 203 (k) loan process. Together we are an extremely knowledgeable team of experts who know all of the governmental requirements of the 203 (k) process and we will assist you every step of the way to make sure that you will receive all of the monies you need to complete the job correctly and on time.
203(k) Eligible Borrowers
- Owner Occupants – Purchase or Refinance
- Non-Profits
- Investors NOT allowed
Eligible Properties
- Single Family (1-4 unit)
- Condominium
- HUD Properties
 Steps to take
- Find a FHA Approved Lender
The home buyer selects an FHA-approved 203(k) lender and gets pre-approved for a loan that will cover both the purchase and repair costs.
- Choose your Contractor
One of the most important steps to turning a “fixer-upper” into a Dream Home is choosing a contractor who understands the 203(k) program and who can assist you with all the renovations wanted and needed on your new home to be. Your contractor of choice should be able to suggest repairs that are mandatory as well as those items that would most directly raise the value of your home. Working with this contractor, you must arrange for a detailed proposal showing the scope of work to be done, including a detailed cost estimate of each repair or improvement of the project once you find a property. Choose your contractor, click here
- Find a Property and Make an Offer
Locate a property with lots of potential, “fixer-upper”, and execute a sales contract after doing a feasibility analysis of the property with your real estate professional. The contract should state that the buyer is seeking a 203(k) loan and that the contract is contingent on loan approval.
- Appraise the Property
The appraisal is performed to determine the value of the property after renovation. It is a must to have your contractor have a complete scope of work and estimate of costs of repairs in order to get credit for all the work planned.
- Loan is Approved and Closed
The borrower, property and requested improvements are approved and the loan closes for an amount that will cover the purchase or refinance cost of the property, along with the improvement costs. The amount of the loan will also include a contingency reserve of 10% to 20% of the total remodeling costs and is used to cover any unforeseen work not included in the original proposal. At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs and improvements during the rehabilitation period.
- Work Begins on the Property
The mortgage payments and remodeling begin after the loan closes. The borrower can decide to have up to six mortgage payments (PITI) put into the cost of rehabilitation if the property is not going to be occupied during construction, but the number of months financed cannot exceed the length of time estimated to complete the rehab. This option frees your out-of-pocket expenses during the time prior to occupying the home.
- Disbursements and Payment
Escrowed funds are released to the contractor during construction through a series of draw requests for completed work. To ensure the completion, 10% of each draw is held back; this money is paid after the lender determines there will be no liens on the property.
- Enjoy your newly Renovated Home
Now it’s time to invite your friends and family over to see your new personalized DREAM HOME that you can truly enjoy for years to come.
 Eligible Work Items
The Streamline loan is intended to facilitate uncomplicated rehabilitation and/or repairs to a home for which plans, consultants, engineers and/or architects are not required.
Eligible items include:
- Repair/Replacement or Upgrades of:
- Windows and Siding
- Roofs, Gutters and Downspouts
- Decks, Patios and Porches
- Flooring
- Electrical, Plumbing and HVAC
- Paint, both Interior and Exterior
- Weatherization, including storm windows and doors, insulation, weather stripping, etc.
- Appliances: Free-standing ranges, refrigerators, and washer/dryers
- Accessibility improvements for persons with disabilities
- Lead based paint stabilization and abatement
- Basement finishing and remodeling that doesn’t include structural repairs
- Basement waterproofing
- Septic systems or well replacement or repair
Ineligible Work Items:
Properties that require the following work items are not eligible for financing under the Streamline loan:
- Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall;
- New construction (including room additions);
- Repair of structural damage;
- Repairs requiring detailed drawings or architectural exhibits;
- Landscaping or similar site amenity improvements;
- Any repair or improvement requiring a work schedule longer than 6 months; or
- Rehabilitation activities that require more than two (2) payments per specialized contractor.
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