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Can the FHA 203k Pay for a New Driveway?

family playing basketballA home buyer called me the other day to ask a great question about buying a foreclosed home and taking care of some of the work on it. Have you seen these vacant houses? Some of them need a lot of love. This house in particular had a driveway issue that was affecting the foundation of the house. Of course I immediately thought of the Full FHA 203k. This home improvement loan must be used when the work involves the structure of the house. The caller asked if the 203k would pay for a new driveway. Since I didn't have the answer at the top of my mind, I leaned on our expert.

National FHA 203k guru Joe Daly is the Renovation Loan Program Manager for us at AmeriFirst. With more than 20 years experience, this guy knows his stuff. In fact, his interviews with us are the most popular videos we have. Our "What is the 203k Loan?" video is one of the most-watched videos we have. So when I have have a new question, I go to Joe.


Two of the main things Joe looked at were 1) Does it affect the structure and 2) Does it add value? If the answers are yes, then it’s likely the work is eligible for funds. In other words you can likely pay for a new driveway with the FHA 203k. Let's look at the scenarios that would make this a reality. You could re-grade the driveway if it's becoming a problem with water in the house. You could also re-pave the driveway or pour new cement or add new rock if other homes nearby have that kind of driveway (called comparables) and the improvement adds value to the home.


Health and safety issue? Maybe - if it's a tripping hazard. If your safety is at risk, then FHA wants that problem taken care of and will likely okay the repairs under the 203k. This works for sidewalks too. As long as the after-improved value comes in and is acceptable to the value of the home then most of these upgrades can be financed.

You can learn more about the 203k and what it covers and doesn't cover in our "Ultimate Guide to Renovation Loans" at the button below.  Get your free copy at the button below.

Ultimate Guide to Renovation Loans


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