FHA 203K Mortgage

Renovation Loans
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Renovation loans such as the FHA 203k program are used to make improvements to an existing property. They can be used to make simple up-grades to a home, such as a kitchen or bath improvement, or to completely re-construct a home that is presently un-livable. They can also be used to tear down an existing structure and re-build a new one using some portion of the existing foundation, or to move a building you purchase or own onto land that you purchase or own.

They are generally used when the value of the home as it exists today is insufficient to support the financing needed to renovate the home.

For example, let’s assume that you are purchasing a home for $200,000 and wish to invest an additional $50,000 to renovate it. Traditional loan programs will lend you the funds to purchase the home but will not advance additional funds to renovate it. Our renovation programs will finance both the purchase and renovation of a property.

Or, let’s assume that you own a home presently worth $200,000 , you have a $200,000 mortgage loan on it, and that you wish to invest $50,000 in improvements. You can’t obtain a traditional home equity loan because you do not have any home equity (home equity is defined as the amount that the value of a home exceeds the mortgages on a home calculated as follows: Present Home Value minus Present Home Mortgages equals Home Equity).

Again, our renovation programs can finance such improvements, provided that the value of the home after the improvements are made supports the loan.