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3 Basic Differences Between a Standard and Limited FHA 203(k) Home Loan

person installing windowYou've found a home in a neighborhood where you've always wanted to live. And you can snatch it up at a good price. So what's stopping you?


Could it be the outdated appliances, dark brown exterior,  and wall-to-wall carpeting? It might not be your dream home just yet, but with an FHA 203(k) renovation loan, it could be. With this loan you can purchase the property and get the extra funds you need to remodel, repair, and renovate. It's unique because you can borrow the funds you'll need based on what your house is expected to be worth after the renovation is complete. 

(The 203(k) can also be used to refinance your current home and make renovations.)


The FHA 203(k) loan is insured by the Federal Housing Administration (FHA), and offers two options: Limited and Standard. Finding the one that's right for you depends on how much you want to spend and what you intend to do. 



3 Differences between the Limited 203(k) and the Standard 203(k)

  1. Structural Repairs.
    LIMITED:  Minor remodeling and non-structural repairs.

    STANDARD:  Major rehabilitation or when repairs are structural or involve landscaping. Examples include jacking up your house to replace the sill plate or knocking the house down to rebuild it (you must leave the foundation). 
  2. HUD Consultant.
    LIMITED: Does not require a HUD consultant.

    STANDARD: Requires the use of a HUD consultant. He will draw up the paperwork and work with you and your contractors to get a write-up before the appraisal and ensure the required renovation is completed. (Your loan officer can work with you to obtain the services of an experienced HUD-approved 203(k) consultant).
  3. Cost.
    LIMITED:  Total renovation costs cannot exceed $35,000. There are no minimum costs.

    STANDARD: Your repairs and renovations can go above $35,000. There is a  minimum repair cost of $5,000. 

Eligible repairs you can make with a Limited 203(k)

  • Repairing or replacing the roof, gutters or downspouts
  • Repairing or replacing HVAC, heating, plumbing, or electrical systems
  • Repairing or replacing flooring
  • Minor remodeling
  • Indoor or outdoor painting
  • Replacing appliances
  • Accessibility upgrades
  • Abatement of lead-based paint
  • Repairing or replacing decks, patios, and porches
  • Waterproofing or finishing a basement
  • Weatherization

Eligible repairs you can make with a Standard 203(k)

  • Plumbing, electrical, heating, and cooling improvements
  • Structural changes
  • Storm shelter additions
  • Appliance and HVAC upgrades
  • Roofing alterations
  • Large landscaping and site improvements
  • Sewage and septic improvements
  • Site conversion (from a single unit to multi-unit property, for example)
  • Site relocation
  • Accessibility upgrades

Of course, there are other nuances that differentiate the Standard from the Limited. If you have more questions, or want something concrete in your hands, download our free eBook guide loaded with 203(k) loan information.


Ultimate Guide to Renovation Loans


Amerifirst is ranked as one of the top twenty FHA 203(k) lenders in the nation for 2020 by the Department of Housing & Urban Development.   


*This is not a commitment to lend. Not all borrowers will qualify; contact us for more information on fees and terms.


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