While FHA 203K loans can be advantageous for those who would like to purchase a home that needs a lot of work or improve their existing home, these loans also come with some restrictions. Below are a few of the restrictions that come along with an FHA 203K loan.
Using an FHA 203K loan prolongs the typical home buying process because you must get lender approval for your planned repairs and contractors before you can close on the home. This means that you must plan what types of repairs you need to make, how much they will cost, and which contracting company you will use before you are able to purchase or refinance a home.
Usually cannot use these types of loans for DIY repairs as your contractor must be approved.
However, in some cases there may be an exception if you can prove that you are qualified to do the work yourself.
If you would like to use an FHA 203K loan to refinance and repair a home that you already own, you must have purchased the property at least 1 year prior to receiving the loan.
Your desired home must require at least $5,000 in repairs in order to receive an FHA 203K loan.
Your approved contractor must complete the home repairs within 6 months of the time that you obtain the loan.
Continue to the next slide to find out how you can qualify and apply for hundreds of thousands of dollars in FHA 203K loans.