203(k) Renovation Loan

The FHA 203(K) Renovation Loan program provides funds for both the purchase and renovation of a home packaged into one mortgage loan. Once the purchase of the home is closed, renovation funds are held in escrow to pay for pre-determined renovation work done by approved renovation contractors.

This program is eligible for use on single family homes as well as 1 to 4 unit buildings; including the conversion of a building from a larger number of units down to 4 or less. Following specific guidelines, the 203k mortgage can also be used on a condominium unit for improvement of the interior only. 

THE PROCESS

• Identify the property
• Provide list of repairs and approximate costs
• Victorian approves contractor
• Loan amount calculated
• Loan closes with renovation funds held in escrow
• Victorian administers draws for repairs
• Work is finalized

FINE PRINT

Total loan amount is calculated based on sales price plus the cost of repairs.

The Repair Escrow Amount is taken from the sales contract and may not be modified without a revised sales contract executed by all parties.

The funds must be used for the repairs specified in the property listing.

Victorian must ensure that all repairs are satisfactorily completed before disbursing the escrow funds.  Repair inspection must be performed by a qualified individual.