Requirements

FHA 203k Loan Requirements Minimum Credit Score
Standard FHA loan amount - 640
Jumbo FHA loan amount - 640
203k Loan Requirements Eligible Transaction Types
Purchase
Rate/Term Refinance - Maximum loan-to-value is 97.75%. Maximum CLTV is 100%
No Cashout Refinance. All funds must be part of the repair escrow to be paid to the contractor
FHA 203k Loan Requirements Down Payment - Purchase Transaction
3.5% of the loan amount (purchase price + repair escrow account)
If HUD Owned Home - as little as $100 down
203k Loan Requirements Repair Escrow Account
Minimum amount - $5,000
If over $35,000 must use a Full 203k loan
FHA 203k Loan Requirements Maximum Loan Amount
County specific. Reference the HUD website for FHA Mortgage Limits
203k Loan Requirements Occupancy Type
Owner occupied only
FHA 203k Loan Requirements Eligible Properties
Owner-occupied properties at least one year old
Attached & detached single family residences
2-4 unit properties
PUD's (i.e. Townhomes)
Condo-units in FHA Approved Project (maximum mortgage cannot exceed 100% of after-improved value)
Modular homes
HUD Owned Home (may qualify for a down payment as little as $100)
203k Loan Requirements Ineligible Properties
Properties less than one year old
Co-ops
Mixed-use
Condotels
Manufactured homes
Log cabin homes
FHA 203k Loan Requirements Maximum Loan-To-Value (LTV)
Purchase - Maximum loan-to-value is 96.50%
Rate/Term Refinance - Maximum loan-to-value is 97.75%. Maximum CLTV is 100%
203k Loan Requirements Maximum Mortgage Amount
Reference Form HUD-92700 203k Maximum Mortgage Worksheet
110% of the after completed or improved value
2-4 unit properties - call for details
FHA203k Loan Requirements Borrower Eligibility
U.S. citizens
Permanent resident aliens
Non-permanent resident aliens:
  • Occupy the property as a principal resident
  • Have a valid social security number
  • Are eligible to work in the United States
First time home buyers allowed
Maximum 4 borrowers allowed
Non-occupant co-borrowers allowed:
  • 1 unit only
  • Non-family member - maximum loan-to-value - 75%
  • Occupying borrower must have valid credit score
203k Loan Requirements Seller Contribution
6% of sales price towards closing costs, pre-paid's, discount points, buy-down fees, and up-front MIP
FHA 203k Loan Requirements Mortgage Insurance
Upfront MIP - 1.00% of the loan amount
Upfront MIP can be paid in cash or financed
Annual MIP is paid monthly:
  • 15 year mortgage or less and LTV greater than 90% - .50%
  • 15 year mortgage or less and LTV less than 90% - NONE
  • 30 year mortgage and LTV greater than 95% - 1.15%
  • 30 year mortgage and LTV less than 90% - 1.10%
Example - $100,000 purchase price, 30 year fixed rate mortgage, 3.5% down payment
  • Down payment - 3.5% times $100,000 or $3,500
  • Upfront MIP - 1.00% times $96,500 or $965
  • Financed Loan Amount - $96,500 + $965 = $97,465
  • Monthly MIP - 1.15% times $96,500 divided by 12 or $92.48 per month
Qualifying Ratios
31/43% debt-to-income (DTI) or as determined by Automated Underwriting Engine (DU/LP)
Receive loan approval from an approved FHA 203k mortgage lender
To determine your eligibility for a mortgage loan call (866) 305-7808 from 8:00 a.m. to 6:00 p.m. Monday – Friday or complete a loan application using our secure encrypted online application.