Skip to content
Fact Checked by Experts

FHA 203k Loan in Bradford County, Florida

Are you thinking about homeownership yet have inadequate cash to buy a new home? There’s some good news for you; you can use a government-backed loan program to buy an older home and repair it instead of buying an expensive apartment.

One of such loan programs is the FHA 203k loan which targets lower-income households. With an FHA 203k mortgage, you conveniently finance your home purchase and renovation costs in one package.

Better still, you can upgrade the property for use as your primary residence. Read on to learn more about the FHA 203k loan, the types of FHA 203k loans, and how the government-backed program works. Plus, we’ll help you understand how to apply for a mortgage.

What is FHA 203k Loan?

The FHA 203k loan is also known as Section 203k or mortgage rehabilitation. It is a particular type of home financing enabling homeowners and prospective buyers to combine renovation expenses and property costs in a single mortgage.

Essentially, the loan allows you to roll all homeownership expenses into one loan, including rehabilitation costs and home price. In some instances, the loan may also include temporary housing funding, such as rental expenses when your house is under repair.

Types of FHA 203k Loans

The Federal Housing Administration (FHA) offers different types of the 203k loan depending on the level of repairs your home requires. The loans are available in two forms as follows;

Streamline 203k Loan

A streamlined loan, also known as a limited loan, is suitable for minor repairs and renovations not exceeding $35,000. The loan doesn’t have a minimum borrowing limit and follows a fairly simple application process owing to the small loan amount involved.

However, every form of renovation carried out using the loan, requires the supervision of a licensed contractor.

Standard 203k Loan

A standard rehab loan is suitable for larger projects exceeding $35,000. The loan allows you to conduct any home renovation except for non-permanent alterations. Such projects may include structural improvements like adding more rooms or relocating your home to a new site.

The loan supports a minimum renovation cost of $5,000 and has a more stringent application process due to the massive scope of work involved. For example, you’ll hire a qualified US Department of Housing consultant to oversee the renovation project from estimation to completion.

The consultant may be a state-approved architect, engineer, inspector, or contractor acting as the primary liaison officer.

What Projects Qualify for FHA 203k Rehab Loan?

Not all home improvement projects qualify for the FHA 203k funding program. For example, luxurious upgrades like swimming pools, hot tubs, barbeque pits, and satellite dishes aren’t eligible for the loan funding.

That aside, you can use proceeds from the mortgage to fund other home renovation projects as follows;

  • Upgrading the home’s energy efficiency.

  • Fixing safety hazards.

  • Repairing gutters and downspouts.

  • Fixing plumbing and waste management system.

  • Roofing and flooring repairs.

  • Improving the home’s aesthetic appeal.

  • Improving the home’s accessibility and functionality.

How the Program Works

The Federal Housing Administration (FHA) doesn’t issue loans to prospective buyers. Instead, the FHA collaborates with approved banks, credit unions, and other financial institutions that give the loan. However, like other government-backed loans, the FHA insures lenders against financial loss in case of loan default.

The loan may have a 15-year or 30-year fixed rate or an adjustable rate payable over the loan period. When you get the loan, a portion of the loan amount will pay off the home price, while the remainder will go into an escrow account for release after completing your renovation.

Generally, when you take the loan, you should begin the repair works within 30 days of closing the loan and complete the project within 6 months of your loan application.

Eligibility Requirements

Most loans have precise eligibility requirements for prospective borrowers, and the FHA 203k program is no exception. Lenders will consider your income, credit score, credit history, and debt-to-income ratio, among other factors.

Below are the minimum eligibility requirements to get a rehab loan:

Credit Score

Lenders will require a minimum credit score of 580 to issue the loan, although some may raise the bar to the 620-640 range. That doesn’t mean you can’t get a loan with a lower credit score. Some lenders still accept a score within the 500-579 range, provided you make a higher down payment.

Either way, the credit score limit is still lower than the 720 that most conventional loans require.

Down Payment

The down payment requirement for an FHA 203k loan is similar to that of other government-backed mortgages. Thus, you’ll pay 3.5% of the total loan amount upfront if you have a credit score of 580 or more. Similarly, you’ll need at least a 10% down payment if your credit score is less than 580.

Luckily, getting an FHA mortgage is now easier, thanks to down payment assistance programs from nonprofit organizations and cash gifts from family members or friends.

Debt-to-Income (DTI) Ratio

Lenders will scrutinize your income, in relation to your monthly expenses to determine if you qualify for the rehab mortgage. To calculate your DTI ratio, mortgage financiers usually divide your gross monthly income by the total monthly debt bill.

Generally, a DTI ratio of less than 43% means you qualify for the mortgage. For example, if you earn $5,000 per month, your maximum expense limit should be 43% of the total earnings. As a result, your mortgage payments, credit bills, and other expenses shouldn’t exceed $2,150 to maintain the maximum DTI allowed.

Home Occupancy

FHA 203k loans are available for buying primary residential property only. For this reason, if you intend to buy a multi-use property containing a commercial and residential unit, you cannot qualify for the loan.


Generally, you should be a US citizen or lawful permanent resident to qualify for the loan. As a result, mortgage financiers will verify your citizenship during the application process to ensure you lawfully reside in a state within America.

Mortgage Insurance Premium

Similar to other government mortgages, an FHA 203k loan requires two forms of insurance premiums. First, you’ll pay an upfront insurance cost of 1.75% of the total loan in a lump sum.

In addition, you’ll pay annual insurance premiums ranging from 0.45%-1.05% of the total loan amount. Mortgage lenders usually break down the annual premium into 12 equal monthly installments.

Refinancing Your Mortgage Using an FHA 203k Loan

Most homeowners often wonder if they qualify for a home renovation loan despite having a residential home. The truth is that if you already own a home, you can still apply for a rehab loan to finance your future renovations.

Assuming you have an outstanding FHA mortgage, you can refinance the mortgage under a streamlined 203k program. As a result, you’ll qualify for lower interest rates and, subsequently, lower monthly payments.

Similarly, you can use the mortgage to rehabilitate a portion of your real estate, so you don’t need to move out of your current home. FHA-approved lenders offer customized renovation loans for qualified homeowners. The rehab program covers home improvement tasks, including;

  • Adding square footage to accommodate more family members.

  • Adding an extra bathroom for guests and other users.

  • Adding cosmetic touches to enhance aesthetic appeal.

  • Upgrading a backyard pool.

3D rendering of a house undergoing renovations

How Does Home Renovation Add Value To Your Property?

Taking a 203k loan to purchase and renovate a property is a noble investment. Not only will you become a homeowner, but you’ll also add value to an existing property through renovation.

Below are ways through which home renovation increases value:

Make the Most of Your Investment

Home renovation guarantees a great return on investment that suits your taste and preferences. Let’s say you buy a fixer-upper property within your preferred neighborhood. The property would have a reasonable price since it hasn’t been updated for a long time.

However, you can renovate the property to match the standards you desire. Working closely with an approved consultant, you can determine the materials, design, layout, and customized aesthetic finishes. Eventually, when you complete the renovations, you’ll be satisfied knowing you fulfilled your ideas.

Combine Your Mortgage Payments

Refinancing your mortgage using a renovation loan helps you combine your mortgage payments, saving you extra cash in the long run.

For example, if you buy an old house with a permanently stained carpet, you can take a limited 203k loan to fix the carpet and other aesthetics. Finally, you’ll have a refurbished home and a new carpet while paying your mortgage to one financial institution.

Increased Your Home’s Market Value

Adding substantial units, such as extra rooms and amenities, increases your property value. For this reason, the best way to increase property value is to take a home renovation loan to finance invaluable improvements.

Let’s say you find a home worth $250,000. Although the home meets the minimum property requirements, it lacks a garage and extra bathroom for your large family.

You could buy the house using a rehab loan, including the cost of fixing a garage and bathroom. Assuming the renovations cost $40,000 and the home’s value after improvement is $310,000, you’ll earn an extra $20,000 in home equity.

FHA 203k Mortgage Application Process

The loan application process is similar to the conventional mortgage, except for a few modifications. That said, the best way to have a hassle-free loan process is to work with an approved lender with experience working on 203k loan specialties.

The following steps will come in handy during your application:

Determine Your Renovation Project

The first step is to decide on the home improvements and modernization you wish to achieve. Here, you’ll consider only the qualifying projects, including appliance replacement, kitchen remodeling, and bathroom upgrading. Before then, you may also want to fix any safety hazards such as broken window panes and mold.

The easiest way to define the project is to write a rehab proposal highlighting the scope of work and the cost estimate. In cases of structural repairs, your rehab proposal should include an interior plan and exterior layout.

Identify an Approved Contractor

Most home renovation tasks aren’t DIY tasks, so it’s critical to hire an approved contractor. The contractor will first prepare an estimate, guide you through material and labor selection, and execute the project to its completion.

For the best results, ensure your contractor has a valid license and insurance to cover liabilities in case of injuries on your project site. In addition, the contractor should have proven experience handling 203k home renovations.

Obtain Your Bids

You can reach out to suitable suppliers to quote their bids based on the project estimate and material cost. As a general rule, the bids should be very accurate since it adds up to the cost of the task and the overall property value.

Changing your bids after submission may attract additional charges due to further appraisal and re-approval.

Submit an Application and Rehab Proposal

When you have the entire paperwork ready, you can complete an application form and submit it with your rehab proposal to an FHA-approved lender. Ensure you give your lender a credit report and income information and meet all eligibility requirements when submitting your application.

Once you file all paperwork and meet the requirements, your loan application proceeds for final approval. You’ll then sign the final documents affirming the property is officially yours.

Home Appraisal

The home you wish to buy must pass through appraisal by the lender’s approved appraiser. At this stage, the lender ascertains an estimated value of the property after improvements and repairs. The lender will then use the after-improvement value to determine the loan amount.

Home Renovation

The contractors can begin the necessary renovation tasks after you finalize the loan and assume ownership. It is therefore advisable to find an alternative residence during the repairs, especially if the project is more extensive.

Final Inspection

The lender’s appraiser will conduct a final home inspection upon completing all repair works. If the renovation is satisfactory, your contractors will receive payment for the job.

Home Occupation

You can now move into the new home after completion and final inspection. Afterward, the lender will expect you to begin paying the mortgage to clear the outstanding balance.

Top 5 Desserts in Bradford County, Florida

Bradford is a rural county in the southwestern part of Jacksonville, Florida. The county began in 1858 as New River County but was later renamed Bradford in honor of Captain Richard Bradford, an instrumental pillar in the American Civil War. Bradford is home to about 30,000 people, with its seat being Starke City.

Bradford boasts many tourist attractions, a serene landscape, sunny weather, and outdoor and indoor activities that attract visitors worldwide. In addition, visitors can taste some of the finest desserts served across various restaurants.

Below are Bradford’s five best desserts you may wish to try.

Key Lime Pie

Key Lime Pie is Florida’s legendary recipe, formerly declared an official dessert in 2006. The pie features a graham cracker crust, sweetened cream, and key lime custard. The chocolate-covered pie, for instance, is ideal for a hot summer day.

Key lime is available across many restaurants in Bradford, including; This and That Café, and Sweet Southern Pie Company, among others.


Bradford County has some of the finest, top-quality candy across Florida. For this reason, the county has top-selling candy shops such as Thornebrook Chocolates and KaboomBoxx Sweets. And what’s more, there are multiple choices and flavors to satisfy your taste for candy.

Ice Cream

Ice cream is an ancient dessert popular among enthusiasts of all ages. Bradford’s homemade ice creams come in various flavors, such as strawberry, salted caramel bacon, and many more. Popular ice cream joints in the county include Ice Cream Station and Dreamette Ice Cream Springfield.

Strawberry Shortcake

The strawberry shortcake is an all-time favorite for dessert enthusiasts, thanks to its refreshing taste. Incredibly, it became Florida’s official state dessert following the signing of a bill by the governor in March 2022. The cake is a brick yellow mass topped with whipped cream and fresh berries.


Donuts are fantastic treats for breakfast, birthdays, and picnics. A visit to Bradford County is never complete until you taste donuts with varying tastes of peanut butter, banana, chocolate, and maple. Visit shops such as Dunkin, Donut Kingdom, and Shipley Donuts for the most delicious donuts.

FHA 203k Loans in Bradford County, Florida - Final Thoughts

Buying a new home requires a substantial input of cash, especially if it has aesthetic finishes and recreational amenities. However, if you don’t have enough cash to buy a home, the FHA provides a cheaper alternative; the FHA 203k loan.

You can get government funding through the loan to pay the home price and retain extra cash to renovate and furnish the property. You can also refinance an existing mortgage and enjoy cheaper interest rates and lower monthly payments.

Contact an FHA-approved lender near you for more information about acquiring an FHA renovation loan.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

Find The Right Mortgage

For more than 20 years, Phil have been helping customers achieve their home purchase and refinance goals by providing them with invaluable resources and support.

Schedule a FREE Consultation
Phil Ganz

Subscribe to Get Your First Time Homebuyer Checklist

Sign up for the weekly newsletter to stay up to date on the latest real estate market trends, loan news, and so much more!