The Streamlined Federal Housing Administration 203(k) Rehabilitation Mortgage is a mortgage program designed to help borrowers purchase and rehabilitate a property.
For many, purchasing a fixer-upper property is appealing. Purchasing these properties allows homebuyers access to areas or neighborhoods outside their initial price range at a cheaper rate.
A rehabilitation mortgage is for properties that need minor cosmetic repairs. These loans typically involve refurbishing projects, including a kitchen remodel, interior and exterior painting, window and door replacement, and more.
What is the Streamlined FHA 203(k) Rehabilitation Mortgage?
The Streamlined FHA 203(k) Rehabilitation Mortgage loan is designed for homes that can be remodeled, repaired, or updated for less than $35,000. This type of loan allows homebuyers to make minor repairs to the property without diving into personal savings.
An advantage of this type of mortgage is that homebuyers can combine the property and renovations into one loan. The loan allows homebuyers to purchase their dream home with available money to make it liveable.
Related: What Can You Do if You Are Buying a Property that Needs Repairs?
What Type of Repairs are Allowed?
While this type of loan does not allow any structural changes to the property, it is essential to remember that cosmetic modifications can transform a house dramatically.
Improvements and repairs homebuyers can accomplish under the Streamlined 203(k) Mortgage include:
- HVAC, Electricals & Plumbing.
- Roofs and gutters.
- Accessibility improvements.
- Kitchen.
- Bathrooms.
- Flooring.
- Painting.
- Appliances.
Under the Streamline Mortgage loan program, the FHA does not cover luxury repairs and replacements such as hot tubs, swimming pools, and bathhouses.
How to Qualify for an FHA 203k?
The Streamlined FHA 203(K) Rehabilitation Mortgage is a type of FHA loan, so any prospective buyer who qualifies for the FHA loan will typically be eligible. Some of the qualifications include:
- A 3.5% down payment if the FICO score is 580 or higher.
- A 10% down payment if the FICO score is between 500 and 579.
- The property must be the homebuyer’s primary residence.
- Borrowers must qualify based on income, credit history, credit score, debt-to-income ratio, and other factors.
- A contractor must perform repairs and renovations.
For information about the Consultant Fees related to construction, see: What details should I know about Section 203(k) consultant fees?
Conclusion
The Streamlined FHA 203(K) Rehabilitation Mortgage is for homebuyers who purchase a property that needs minor cosmetic repairs. Although this type of loan does not cover any structural modifications or luxury editions to the property, cosmetic changes can dramatically transform a home.
This FHA program allows homebuyers to purchase a fixer-upper property in their desired location, making improvements to the home without diving into personal savings.
Related: FHA Mortgages
Marimark Mortgage
Marimark Mortgage is based in Tampa, Florida, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in mortgages for first-time homebuyers, conventional home mortgages, refinance loans, reverse mortgages, and FHA, VA, and USDA mortgage options. We’ve worked extensively with cash-out refinancing and help clients to lower their monthly mortgage payments.
To get started with a mortgage to buy your next home, please fill out our Quick Mortgage Application or contact us.

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