FHA 203K Loan Requirements

If you’re familiar with FHA loans, you already understand how to qualify for them since FHA 203K loans are a subsidiary of FHA loans. But since the loan program is slightly different, we’ll cover the full aspect of how to qualify for the FHA 203K loan.

FHA 203K Loan Credit Scores

Credit scores are the first thing all lenders look at when determining if you qualify for a loan. It’s what tells us if you are a responsible borrower and can handle your debts.

Typically, FHA loans require just a 580-credit score. Depending on the circumstances, we may need a slightly higher credit score, but the requirements remain low, making it easy for most people to qualify.

Along with the credit score, we’ll look at your credit history. Make sure your credit history is free of blemishes such as late payments, credit lines extended beyond 30% of your credit line, or collections.

FHA 203K Down Payment Requirements

One of the best parts of the FHA loan is the low down payment requirements. Typically, you need just 3.5% down of the home’s purchase price.

In this case, though, since you’re borrowing more than the purchase price, you’re also borrowing money to fix up the home, you should put down 3.5% of the total project cost.

Here’s the good news, though.

You can use gift funds for your FHA 203K down payment. Most borrowers can use 100% gift funds for the down payment. This means you can receive funds from family, an employer, or a charitable organization and use it for the down payment.

Before you do, though, we’ll need to track the funds to ensure they truly are a gift and not a loan you must repay. We track gift funds with a gift letter from the donor and a paper trail of the funds going from the donor to you for use as the down payment.

FHA 203K Occupancy Requirements

The FHA program is only for owner-occupied properties. The FHA guarantees (backs up) the loans for lenders to give borrowers a chance to get financing for a home to live in, not a home to fix and flip or fix and rent out.

If the home is livable right away, you must occupy it right away. If the work to be done is too invasive and would make it difficult to live with, you might be able to live elsewhere while the work is done.

No matter how invasive the work is, though, all borrowers must occupy the property within six months of closing on the loan.

FHA 203K Citizenship Requirements

Like any government-backed loan, you must prove your US citizenship to use the 203K program. You must either be a US citizen or a lawful permanent resident and be able to prove it.

Are you looking to get Pre-Approved?


The Standard 203(k) may be used to purchase or refinance a home that needs remodeling and/or structural repairs. There is a minimum rehabilitation cost of $5,000 and the use of a 203(k) consultant is required.

Max completion time: 180 days (6 months)

Landscaping and hardscaping allowed

$5K minimum and no max repair amount

Structural changes are allowed


The Limited 203(k) may be used to purchase or refinance a home that needs minor remodeling and non-structural repairs not exceeding $35,000. The use of a 203(k) consultant is not required and there is no minimum rehabilitation cost.

Minor remodeling

HUD consultant is not required

Max completion time: 90 days (3 months)

No min and up to $35K in total renovations

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I’ve had the best experience for being a first time homebuyer,everyone was beyond helpful and explained all the steps in detail to someone with zero knowledge of the home buying process.

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My City was fantastic to work with. They were extremely knowledgeable and answered all questions quickly.

James S

Honestly, the process of me receiving and acquiring my mortgage was professional, efficient, and satisfying. I want to thank everyone at My City for they have done for me.

About the loan

This loan program provides financing to buy fixer-uppers and to fix them up all in one loan. It’s a great loan program that helps people buy homes they want and make them look how they want all without breaking the bank.

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