Finance a home purchase (or refinance) plus the cost of renovations in a single FHA loan with just 3.5% down. The Standard 203(k) handles major and structural rehab; the Limited 203(k) covers cosmetic repairs up to ~$35,000. Turn a Texas fixer-upper into your home with one loan, one closing, one payment.
The FHA 203(k) lets you roll the purchase (or refinance) of a home and the cost of its renovations into a single FHA-backed mortgage — with FHA's low 3.5% down payment and flexible credit. Instead of buying a fixer-upper and scrambling for a separate, higher-rate renovation loan, you finance everything together based on the home's "as-completed" value: what it will be worth once the work is done.
Distressed homes often can't get a normal mortgage — broken systems, a bad roof, or safety issues make them ineligible. The 203(k) is designed for exactly these properties: finance the home and the work to make it safe and livable in one loan, at one closing.
Rather than a mortgage plus a separate high-interest home-improvement loan or credit cards, the 203(k) wraps everything into a single FHA mortgage with one monthly payment at mortgage rates.
Major / structural rehab
For larger or structural projects — room additions, foundation work, moving walls, major system replacement, structural repairs. Generally requires an FHA-approved 203(k) consultant to define the scope, prepare the work write-up, and oversee draws. No fixed dollar cap on repairs, within FHA loan limits.
Cosmetic / smaller
For non-structural, cosmetic work — paint, flooring, kitchen and bath updates, appliances, roofing, HVAC. Capped at roughly $35,000 in total repair costs, with a simpler process and no required HUD consultant. Ideal for lighter rehabs.
| Feature | Standard 203(k) | Limited 203(k) |
|---|---|---|
| Repair cap | No fixed cap (within FHA limit) | ~$35,000 |
| Structural work | Allowed | Not allowed |
| HUD consultant | Required | Not required |
| Best for | Major rehab | Cosmetic updates |
Like all FHA loans, expect an upfront mortgage insurance premium of 1.75% (financed into the loan) plus annual MIP in your payment. The trade-off for that insurance is FHA's low down payment and flexible credit. I'll show you the complete payment picture.
FHA 203(k) is meant to make homes safe, sound, and livable — not for luxury upgrades like new pools. If you want luxury improvements or an investment property, the conventional HomeStyle loan is the alternative.
Simplified estimate; actual loan is based on the lesser of as-completed value or cost, plus FHA limits, UFMIP, and contingency reserve. For illustration only — not an offer or approval. Excludes taxes, insurance, HOA, and mortgage insurance.
203(k) is a specialized FHA product not every lender does well. As a NEXA broker I place your file with wholesale investors experienced in renovation lending and consultant coordination — you deal with me, not the lender.
When renovating a Texas homestead with financed funds, the work must be properly documented and contractor liens handled under Texas law. As with cash-out, Texas homestead protections are strict — the renovation contract and lien paperwork must be executed correctly, which I coordinate with your title company and contractor.
| Feature | FHA 203(k) | HomeStyle (Conv) |
|---|---|---|
| Min down | 3.5% | 3%–5% (primary) |
| Min credit | ~580 | ~620+ |
| Occupancy | Primary only | Primary, 2nd, investment |
| Mortgage insurance | UFMIP + annual MIP | PMI; none at 20% down |
| Luxury items (e.g. pool) | Not allowed | Allowed |
| Repair cap | Standard: none / Limited: ~$35K | Up to conforming limit |
| Best for | Lower credit, lower down | Stronger credit, investment, luxury |
Stronger credit, want to renovate an investment property, or planning luxury upgrades? The conventional HomeStyle loan may fit better — see that page.
Let's roll the purchase and renovations into one FHA loan with 3.5% down — and handle the consultant, draws, and Texas paperwork for you. No cost, no obligation. English & Turkish.