Renovation · Government-Backed

FHA 203(k) Renovation Loans

The FHA 203(k) lets you buy a home that needs work and finance the repairs in the same mortgage — with just 3.5% down and FHA's flexible credit. Recent updates raised the Limited program's repair budget to $75,000 and dropped the required consultant.

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FHA 203(k) at a glance

Buy, renovate, and finance it as one

3.5%
Minimum down payment, on the combined purchase plus renovation amount.
$75,000
Repair budget on the Limited 203(k) — recently raised from $35,000, with no consultant required.
$5,000+
The Standard 203(k) handles larger, structural projects (minimum $5,000, no set cap beyond the area FHA limit).

FHA mortgage insurance applies. Limits, timelines, and consultant rules are set by HUD/FHA and reviewed annually — confirm current terms with Bond Street.

Two versions, one program

Limited vs. Standard 203(k)

Limited 203(k)

For non-structural and cosmetic work — kitchens, baths, flooring, roofing, HVAC — up to $75,000 in repairs, with the FHA consultant now optional.

Standard 203(k)

For larger or structural projects — additions, moving walls, major systems — with a $5,000 minimum, a HUD consultant, and no set cap beyond the area FHA limit.

One loan, one closing

Both versions combine the home and the renovation into a single FHA mortgage with one monthly payment.

Instant equity potential

Because the loan is based on the after-improved value, finishing the work can build equity from day one.

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Eligibility

What it takes to qualify

  • 3.5% down with a 580+ credit score (lenders may set higher minimums)
  • The home must be your primary residence (1–4 units, eligible condos, or manufactured homes)
  • Limited 203(k): non-structural work up to $75,000; Standard 203(k): $5,000 minimum for larger/structural projects
  • Work performed by a licensed contractor; funds released from escrow in stages as work is completed
  • An upfront and annual FHA mortgage insurance premium applies
  • Total loan within the 2026 county FHA limit ($1,249,125 for a one-unit home in these counties)

Common questions

FHA 203(k) FAQs

What's the difference between Limited and Standard 203(k)?

Limited covers non-structural work up to $75,000 with the consultant now optional. Standard handles larger or structural projects (additions, moving walls, major systems), requires a HUD consultant, and has a $5,000 minimum with no set cap beyond the area FHA limit.

How much renovation can I finance?

Up to $75,000 on the Limited program. The Standard program isn't capped at a flat dollar amount — it's bounded by the area FHA loan limit, which is $1,249,125 for a one-unit home in these counties for 2026.

How do the renovation funds get paid out?

The repair money is held in escrow and released to your contractor in stages (draws) as the work is inspected and verified — so funds track completed work rather than being handed over upfront.

Can I use a 203(k) for an investment property?

No — FHA 203(k) is for primary residences. For investment or second homes, look at the conventional HomeStyle or CHOICERenovation loans.

Our trusted lending partner

Bond Street Mortgage

We work hand-in-hand with Bond Street Mortgage, serving Bergen, Passaic, Morris, Hudson, and Essex counties. Their team coordinates with us from pre-approval through closing.

Talk to the team

See what you could renovate

Reach out and we'll connect you with the right loan path and a pre-approval that holds weight in a competitive market.

(201) 240-5200  ·  chopper@chopperrussoteam.com
Check your buying power

RE/MAX Select — Chopper Russo Team. Thomas "Chopper" Russo, 392 Ramapo Valley Rd, Oakland, NJ 07436. Not a commitment to lend. Loan products, rates, renovation limits, mortgage insurance, and approval are provided by Bond Street Mortgage and HUD/FHA subject to their terms and qualification.

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