Is an FHA Limited 203(k) or an FHA 203(k) Consultant Loan Right for me?

The FHA Limited 203(k) and standard FHA 203(k) Consultant Loan eliminate the need for large out-of-pocket renovation costs that can drain your savings. With these options you can simplify the financing process by financing your home and your renovation cost into one FHA 203(k) loan. Whether you’re repairing your current home or purchasing a fixer-upper, you should consider applying for either a Limited K or a Consultant K.

What is an FHA Limited (Streamline) 203(k) Loan?

Designed specifically for homes that may need cosmetic repairs or upgrades, the Limited (formerly known as Streamline) 203(k) Loan is intended for homes that can be remodeled, repaired, or updated for less than $35,000. As long as the intended repairs don’t exceed that amount, you may be eligible for an FHA Limited 203(k) Loan from HomeBridge Financial Services.

Before considering applying for a Limited (formerly known as Streamline) 203(k) Loan, here is a sample of some projects that are eligible.

Eligible:

  • Minor kitchen remodeling which does not involve structural repairs
  • Pool repairs
  • Interior and exterior painting
  • Repair/replacement/upgrade of appliances
  • Window and door replacements
  • Replace/repair roof, gutters and downspouts
  • Basement finishing/remodeling/waterproofing (not requiring structural repairs)
  • Improvement for accessibility for persons with disabilities
  • AND more!

Ineligible:

  • Major rehabilitation or major remodeling
  • New construction, including room addition
  • Repairs of structural damage
  • Landscaping or similar site amenity improvements
  • Any repair requiring a work schedule greater than 6 months
  • Foundation work
  • New swimming pool
  • Repairs requiring detailed drawings or architectural exhibits
  • New tennis court, gazebo, or bathhouse
  • Other types of luxury items

Speak to a HomeBridge Mortgage Loan Originator to get a full list of the home improvements you can make.

What is an FHA 203(k) Consultant Loan?

Typically reserved for homes requiring more than $35,000 in repairs, HomeBridge’s Consultant K home loan is usually used for homes with more extensive work to be done. In order to apply for the loan, there must be at least $5,000 worth of repairs, and loan limits are based on property type and location. Since the Consultant K allows for more extensive work, more supervision is required throughout the process. A 203(k) Consultant will inspect your property and help you determine which repairs are required to bring the property up to FHA minimum standards.

Below is just a sample of eligible repairs with a 203(k) Consultant Loan.

Eligible:

  • Full kitchen or bathroom remodel
  • Garage (attached/detached/new)
  • Structural alterations and additions
  • Major Landscaping/decks/fencing
  • Permanent improvements to the house
  • Install appliances
  • Repair swimming pool
  • Install flooring / tile
  • Interior and exterior painting
  • Improvements that are a permanent part of the real estate

Ineligible:

  • New tennis court
  • Gazebo or bathhouse
  • Additions or alterations for commercial use
  • Photo mural
  • New Swimming pool
  • Outdoor fireplace / barbecue pit
  • Other types of luxury items

For Consultant K loans, the 203(k) contractor must also sign the work write-up, acknowledging the cost of repairs. With the Limited K, contractors must sign a detailed contractor bid, which may include a breakdown of labor and materials for each part of the contract.

If you’re purchasing a home and happen to be a professional contractor and/or believe you’re otherwise qualified to perform some of the renovation work yourself, talk with a HomeBridge Mortgage Loan Originator today. Special rules apply in both of these circumstances, and our experts can explain in detail.

How Do Limited (formerly known as Streamline) 203(k) and 203(k) Consultant Loans
Work?

In the past, those who had purchased a fixer-upper would have to apply for two loans in order to finance the repairs: a mortgage and a separate home equity loan or use their savings account for renovations. Now, the two loans are combined, resulting in an easy and convenient loan known as the Limited 203(k) Loan or the Standard 203(k) Consultant Loan. The loans can be either adjustable- or fixed-rate mortgages.


With Limited 203(k) and Consultant K Loans, you can begin your home renovations as soon as the loan closes.

  • Repairs must start within 30 days of closing and be completed
    within six months
  • With Limited K Loans, contractors can receive 50% of the total
    amount when renovations begin, with the remaining amount due as soon as the final
    inspection is complete
  • With Consultant K Loans, the Consultant inspects the repairs as
    they’re completed and requests the lender to release the funds
  • In both cases, any remaining funds are applied to the principal balance of the loan

The above content is for general informational purposes only. Please speak to a Mortgage Loan Originator to discuss loan options available.

We recognize this is a difficult time for many people. Click here or call 866-913-2951 for more information and to learn about current options available to our borrowers.