Home Improvement: 203K Loans
Our Home Improvement expert explains a new - and especially effective for expanding families or first time buyers - way to finance those home improvement projects you've been dreaming of. 

Have you heard of a 203K? No, this is not a new type of retirement plan. It is actually a pretty neat way to finance those home improvement projects you have been wanting to do now that you have decided to stay in your current home. In the past, about the only options one had for financing major improvements or repairs were with a home equity line of credit or good old cash (or a credit card with a high limit). Now if you plan to refinance with the low interest rates you can utilize an FHA 203k. There are actually two versions: the full or standard 203k and the streamline 203k available depending on what you intend to do and how much you intend to spend. Let me start off by saying I am in no way an expert on these types of loans and you should consult a loan professional for the specific details.

These mortgage options can be used by buyers or home owners looking to refinance and upgrade. You can buy a fixer-upper and have a professional perform the work or if you want to add a bathroom, maybe a deck and renovate your kitchen complete with new appliances you can roll the cost into one mortgage. The two options have very specific limits. To start with, the standard 203k has a minimum repair budget of $5,000 and covers structural repair). The streamline 203k has a repair budget cap of $35,000 and does not include structural repairs. The streamline version also requires you to stay within the existing foot print of the house. No additions.

So do you end up with a second mortgage payment? Fortunately 203k loans help buyers roll the cost of this work directly into the mortgage, amortizing the cost of the work over the life of the mortgage. A $25,000 bill for the improvements or repairs is daunting. But what about $150 a month? With one of these loans the 203k can add about $6 per month to your house payment for every $1,000 in repairs or improvements you finance.

Pretty cool - especially for first time home buyers starting out or the young family needing more space or renovations to their home. You love the neighborhood but are outgrowing the space.

This is a wonderful product that not many people are aware of and equally not all loan officers are qualified and capable of executing. If you are looking to do some upgrade projects this year and this sounds like a good financing option, HomeServicesLink can direct you to some experienced 203k loan resources. We can also direct you to some reliable, insured contractors to execute the work by contacting us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (513)271-1888. We are here to help you make home ownership easier. Let us know if there are other topics you would like us to address.