Purchase plus renovation
The loan finances the buy and the rehab budget together, based on the property's value after the planned work is done.
Loan Program · FHA 203k
FHA 203k loans. Buy it and fix it, in one loan.
The short answer
Keep reading for the full breakdownAn FHA 203k loan finances the purchase of a property and the cost of renovating it in a single owner-occupied loan, with the low down payment and flexible credit of standard FHA. You borrow against what the property will be worth after the work, not just what it is worth today.
Because it is FHA, it requires owner-occupancy, so this is not a tool for a non-owner-occupied flip. The investor angle is a live-in value-add: buy a fixer you can live in, including up to a four-unit, renovate it with the loan, build equity as the work lands, and rent the other units. For a pure flip you do not live in, a bridge loan is the tool instead.
01 ·The Program
What a 203k is
A 203k is an FHA renovation loan. It wraps the purchase price and the renovation budget into one loan, so you are not stacking a separate rehab loan on top of a mortgage.
It carries the same profile as standard FHA: a low down payment, more flexible credit than conventional, and an owner-occupancy requirement. Mortgage insurance applies, the same as a regular FHA loan.
The investor angle: a live-in value-add
Buy a property that needs work, live in it, and use the 203k to fund the renovation. On a two to four unit, you live in one unit and rent the others while the improvements raise the value.
That is forced appreciation with a low down payment in. You are building equity through the work itself, then setting up a property you can hold as a rental or refinance down the road.
02 ·How It Works
The mechanics of a 203k
One loan, two jobs. Here is how it holds together.
Owner-occupied, up to four units
You must live in the property. On a two to four unit, you occupy one unit and can rent the rest while you improve it.
The FHA profile
A low down payment and flexible credit, the same accessible profile as standard FHA, with mortgage insurance applying.
A managed renovation
The renovation funds are handled through a structured process with contractors and draws. It is more paperwork than a plain purchase, by design.
03 ·At a Glance
FHA 203k, in short
Educational content, not a rate quote or a commitment to lend. FHA 203k requires owner-occupancy. Down payment, mortgage insurance, renovation requirements, and eligibility vary and are subject to change. Ridge Lending Group, a DBA of Geneva Financial, LLC, NMLS #42056, is not endorsed by, or acting on behalf of, HUD, FHA, or any agency of the federal government. All loans are subject to credit and underwriting approval. Not all applicants will qualify.
- What it finances
- Purchase plus renovation, in one loan
- Based on
- The property's value after the planned work
- Occupancy
- Owner-occupied, your primary residence
- Units
- Up to four, live in one and rent the rest
- Down payment
- A low minimum, the standard FHA profile
- Not for
- A non-owner-occupied flip, use a bridge loan for that
The property nobody else wanted, the one that needs a kitchen and a roof, is often an ideal first deal. A 203k lets you buy it, fix it, and live in it while the work turns a fixer into equity.
Illustrative scenario. Details anonymized.
04 ·The Path
Force the value, then decide
A 203k is a way to create value rather than pay full price for it. You buy below move-in condition, fund the improvements through the loan, and the work itself raises what the property is worth. Living there is the requirement, and it is also the point: you are on site while the rehab happens.
When the dust settles, you have options. Hold it as a rental when you move on, or refinance once there is equity and the property is stabilized. If your plan is a flip you never live in, that is a different loan, and a bridge loan is the right tool. The 203k is for the value-add you call home for a while.
05 ·FAQ
Questions, plainly answered
An FHA renovation loan that finances the purchase of a property and the cost of renovating it in one owner-occupied loan, based on the property's value after the planned work.
Keep Going
Related reading
Turn a fixer into equity, while you live in it.
Twenty minutes with a real person. We walk through whether a 203k fits the property you have in mind and how the renovation financing works.
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