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FHA 203k Loan in Leon County, Florida

FHA 203k financing is a fantastic program that lets homebuyers in Leon County borrow the amount needed to acquire a home and extra funds to fix or remodel it. Over 25% of US homes are more than 60 years old and require significant renovations and upgrades. Given that it is a government-sponsored program, the FHA understands this and permits homebuyers to include the cost of remodeling or renovations in their mortgage.

That way, homebuyers can get a fixer-upper plus funds for renovations and upgrades, which they'll pay back as they repay the mortgage. All a homebuyer needs to do is put at least 3.5% down and meet a few other requirements.

When searching for a house, especially in expensive areas, financing through the FHA 203k plan will undoubtedly increase your options. Additionally, it's a practical way of funding repairs and modernizations.

Moreover, since they are FHA-insured, the qualification requirements for 203K loans are far more flexible than those for conventional rehab loans.

FHA 203K loans are available in "streamlined" and "full" packages. The "streamlined" version is ideal for cosmetic renovations or simply replacing equipment. The "full" loan permits renovations, including significant structural modifications and repairs.

However, you need to know how 203K loans operate and which precise renovation package suits your needs before you ask for one.

Benefits of FHA 203K Loans

The ability to finance both the purchase amount and the remodeling costs with a single loan at a competitive interest rate is the key advantage of the FHA 203K lending program. 203k loan guidelines also permit you to use the cash to pay for temporary accommodation while your home is being renovated.

Moreover, if you already have a home, you can refinance the mortgage into a 203K loan and get the funds for repairs and modernization.

Here's a breakdown of the pros and cons of the FHA 203K loan program.


  • FICO scores as low as 500 are accepted.

  • Down payments as low as 3.5% are accepted.

  • Take out more than the purchase price to cover any necessary repairs.

  • Finance up to six months' worth of mortgage payments into the loan if you can't stay in the house while it's being fixed.

  • Adjustable and fixed rates are available.

  • FHA 203K refinance options are available.

  • Increases your home's value right away.

  • Gift funds can be used to make the down payment.

  • You can have co-borrowers who are not tenants.

  • The loans can be paired with the $100 down HUD deal.

  • The seller may still cover up to 6% of the buy-down and closing costs.


  • Interest rates are typically higher than traditional FHA rates.

  • Involves a tremendous amount of paperwork.

  • The paperwork and planning determine the length of the closing period.

  • You may have to get mortgage insurance.

  • Investment properties aren't eligible.

  • You might have to work with a 203K consultant in addition to an FHA-approved contractor.

How does the FHA 203K program work?

The total and streamlined 203k loans have different loan amounts and qualifying projects. Which version you need depends on the type and scope of the modifications you intend to make. The total 203k loan funds fixes and modifications with a budget ranging from $5K to the county's max FHA loan cap.

On the other hand, the streamlined 203k is only accessible for improvements under $35,000. The FHA often disqualifies improvements like a pool or outdoor kitchen since it considers them luxuries.

For unforeseeable repairs, contingency funds are typically included in the loan. The funds may then be utilized for a principal reduction or further upgrades if all items in the bid have been taken care of.

If you already own a house, you can get funding for the repairs and upgrades you want to make by refinancing into a 203k loan. You won't need to sell and relocate if you can restore your house to practical use.

Full FHA 203k Loan

If your house requires structural work, has hazardous landscaping, or your rehabilitation budget is over $35,000, this is the 203K loan to seek. The cost of repairs must be greater than $5,000. It's also referred to as a standard 203K loan.

The maximum loan amount, however, is based on various factors, including the county's maximum FHA loan ceiling for your particular type of residence.

The standard 203K loan requires borrowers to work with an FHA-approved contractor and a HUD consultant. The latter will attest that the agreed-upon contract carried out the work and that the house now satisfies the basic home-living standards.

The following renovations are eligible for the full 203K loan:

  • Increasing the size of the windows to let in more light.

  • Renovating the basement or attic.

  • Structural changes and repairs to the foundation, frames, etc.

  • Elevating the base or building.

  • Acquiring a building on one site and transferring it to a foundation on another.

  • Installing a retaining wall to prevent flooding.

  • Removing or fixing an in-ground pool; not constructing a new one.

  • Installing a new porch, deck, or patio or fixing an existing one.

  • Making the home handicap-accessible.

  • Converting a single-family home into a 2, 3, or 4-unit building.

  • Building a garage if one isn't there.

  • Joining the kitchen and dining room to increase the kitchen's size.

Streamlined FHA 203k Loan

When a house requires non-structural repairs, such as those suggested by a private inspector or an FHA-approved assessor, you may be eligible for the FHA Streamline 203K loan, also known as the 203k Limited loan. The cost of the cosmetic repairs shouldn't be greater than $35,000.

Homeowners can use this money to maintain their home, improve it, or even tidy it up for sale. The loan can also be used to put a recently purchased house in move-in condition. There is no mandatory minimum, though.

This loan can't be used to pay off your mortgage. You don't have to hire a HUD consultant. But to demonstrate that you comprehend the contractor's proposal, you will need to draft a comprehensive work plan.

What kinds of projects qualify for a streamlined 203K loan?

  • Window replacement to increase energy efficiency.

  • Replacing the floor.

  • Installing new bathroom and kitchen countertops.

  • Repainting a roof.

  • Installing new bathtubs and showers.

  • Gutter and downspout replacement.

  • Septic system and well repairs.

  • Putting up new siding.

  • Removing any hazards to health and safety, such as lead paint, from the house.

  • Landscaping and further exterior upgrades.

  • Installing or fixing fences, walkways, and driveways.

  • Modernizing the HVAC, plumbing, and electrical systems.

Model house that need renovation

What are the eligibility requirements for FHA 203k Loan?

Although they have unique objectives, FHA 203K loans are just an FHA loan program. They adhere to FHA lending regulations and have more lenient eligibility requirements than conventional mortgages.

  • Credit score - An FHA 203k loan requires a credit score of 500 or higher.

  • Down-payment - Every borrower must make at least a 3.5% down payment, or 10% if their FICO score is under 580. State programs may assist with the down payment for buying a home for the first time.

  • Maximum loan amount - The max loan amount for FHA loans in Leon County, Florida, is $420,680 for single-family homes, $538,650 for duplexes, $651,050 for tri-plexes, and $809,150 for quad-plexes.

  • Foreclosure - You mustn't have experienced foreclosure within the last 3 years.

What's the application process for a 203K loan in Leon County, Florida?

Here's an outline of the process of purchasing a home using an FHA 203k loan.

Step 1 - Meet with an FHA-approved loan officer

The lender you choose must be FHA-affiliated, and you must be ready to give them your Social Security number, income, debt history, and other info. Additionally, confirm that you have at least a 3.5% down payment.

While researching loan choices and lenders, keep in mind your unique characteristics. Specific lenders work well with certain applicants.

But generally, an excellent FHA-approved lender will:

  • Accept credit ratings as low as 500.

  • Offer FHA 203k loans.

  • Provide affordable rates and fees.

  • Have an excellent processing and underwriting system to streamline the loan application process.

  • I will effectively communicate with you and provide updates throughout the process.

Step 2 - Request pre-approval

Go over the many renovation loan options with your loan officer and see which one could suit you. This will help you determine what kinds of homes to look for.

Step 3 - Select a house and a contractor

While hunting for a house, interview possible co-contractors, too. Enter into a contract with the seller and an FHA-approved contractor.

Step 4 - Hire a 203K consultant

If you intend to ask for a full 203k loan, you must work with a HUD consultant. They will carry out the inspection and compile a report of their findings.

Determine the necessary renovations or repairs that have FHA approval. The money from the loan might be utilized to remodel the house entirely or to update it. The minimum repair budget must be $5000.

Step 5 - Ask the contractor for a written estimate

Interview the contractor and request quotations for the work so you can share the information with the loan officer.

Step 6 - Send all the necessary information to the underwriter

You must give your loan officer a copy of the purchase agreement and the contractor's renovation estimates.

Step 7 - Appraisal, Review, and Underwriting

An appraisal will be conducted and reviewed after the purchase agreement and the contractor's bid have been received and signed.

If you plan on altering the floor plan, you must also submit specs and blueprints for review. The loan paperwork will then be sent to the underwriters.

Step 8 - Close the loan

Once the loan, the remodel plan, and the contractor's bid are approved, the seller is compensated for their property.

The seller is paid for their home once the lender, the contractor, and the remodel design are authorized. The remaining funds for the renovation are held in escrow to be distributed per the contract stipulation.

Step 9 - Get settled in your new house

The upgrades must begin within 30 days of the finance agreement closing and be finished within 6 months. If the renovations are minor, you may be able to reside in the house at that time.

How soon will the contractor be compensated for their work?

The contractor won't receive payment in advance or at loan closing. Instead, they will receive payment after each project phase. However, inspectors will verify that the phase has been completed per the signed contract before any draws can be made.

The 203k structured loan only permits one initial and one final draw per contractor, whereas the structured 203k loan allows up to five draws.

If I purchase a fixer-upper but cannot live in it while it's fixed, do I have to start making mortgage payments immediately?

You can load up to six months' worth of mortgage payments into the loan if you can't stay in the house while it's being fixed. But the HUD consultant must certify that the home is unlivable without fixing.

Additional Fees and Expenses That Can Be Financed with An FHA 203k Loan

Throughout the process, you may incur the following fees, which can also be rolled into the loan:

  • Fees for architects and engineers

  • The HUD consultant fee

  • Inspection fees

  • Charges for title updates

  • Building licenses

  • Any required feasibility studies?

  • Six months of payment reserves if you can't live in the property while it's under renovation.

How does a 203K loan add value?

The decision to purchase a home is a significant one. It's not only an investment but also where you'll live. It is best to buy a house that needs renovation and invest in the improvements that match your preferences and lifestyle rather than buying one that has already been renovated and paying for expensive and unpleasant upgrades made by the previous owner.

Additionally, expanding the kitchen, adding an extra bathroom, installing a garage, and repairing the pool will boost the value of your home. However, if you choose an already renovated high-end home, you might not have enough money to make these additions if they are missing.

That means you'll have to get an additional line of credit to make these improvements or contend with sharing a bathroom with your kids and leaving your car out in the open, for now.

And if you already own a home but can't afford the repairs and upgrades it needs, refinancing into a 203K loan will provide you with the funds needed for the renovation project. You won't be forced to sell it at a discount and move.

What is the set timeframe for renovations?

Work must start within thirty days of loan approval and must not be postponed for more than 30 days in a row. The project must be finished within six months of the mortgage closing.

About Leon County, Florida

Leon County, which is situated in the Florida Panhandle, bears the name of the Spanish traveler Juan Ponce de Leon. Ponce de Leon is renowned for becoming the first European to navigate Florida in the early sixteenth century.

The county, created in 1824, was a well-known plantation until slavery was abolished. It was also one of the largest cotton-producing counties in America.

The area now occupied by Leon County, which spans more than 700 square miles, was formerly a portion of Escambia and Gadsden counties. The county has about 275,000 residents. Tallahassee is the central city and county headquarters.

Residents here take great pleasure in living in the county with the highest average level of education in the entire state. It is home to Florida's most elite universities, Florida State and Florida A&M.

Also well-known are its tourist attractions, which include the Tallahassee Skate Park, Maclay Gardens, Lake Ella, the Museum of History and Natural Science, the Tallahassee Automobile Museum, and the Old State Capital Museum. The city is renowned for having a thriving arts community.

Enjoy these attractions, then when it becomes hot, stop by any of the following places for luscious, gently melting bites.

Nekter Juice Bar

Nekter Juice Bar is well-known for its juice bars, smoothies, ice cream, acai bowls, and frozen yogurt. The additional options, such as lemonades and "skoop," are alluring.

They also have detox juice, which is helpful if you overindulged on holiday delights and want to get back on track with healthy dining habits. You should surely visit this bar.

Nothing Bundt Cakes

This is a store that sells cupcakes, sweets, and baked goods. You may buy a variety of tiny cakes to experience a variety of your favorites.

Favorite flavors, including white chocolate raspberry and lemon raspberry, are available. Thanks to the prompt and polite service, you'll be in and out in a short while.

Sugar Rush Bar

This ice cream parlor is adorable. It offers a selection of milkshakes and ice cream in addition to a candy wall.

Their strawberry cheesecake comes with a slice of cheesecake topping. They have a TV that plays vintage cartoons, so bring the kids along for the adventure.

Treva's Pastries and Fine Foods

Treva's is a gourmet cuisine and bistro-style dessert shop. Many sweet treats, gourmet cakes, croissants, pastries, savory soups, salads, and sandwiches are available to go or to enjoy in-store with a cup of freshly roasted Lucky Goat coffee.

There are also mouthwatering gourmet entrees like Beef Bourguignon and Ginger Chicken, as well as a wide variety of soups like the traditional Cream of Tomato, French Onion, or Lentil, or something unique like Ginger Carrot or African Peanut.

The Pudding Junkie

The best variety of pudding flavors can be found at this tiny pudding shop within the G & G Caribbean restaurant.

For takeout, desserts are already wrapped in plastic tubs. Expect a perfect balance of treats that will entice you to return for more.

Does your home require some repairs and upgrades?

Many homes in the US could use some renovation and modernization. Research says that over a quarter of all houses in the US are over 60 years old. Whether you want to purchase a home or already have one, FHA 203k loans can finance most restoration and modernization work. You'll be able to restore your home to practical use and perhaps add some upgrades you like.

That said, renovations made feasible by 203k loans are typically the responsibility of FHA-approved contractors and must be inspected and approved by 203K inspectors. To guarantee that all program requirements are met, always engage a contractor with experience working on such projects.

You can consult with local home improvement businesses for recommendations from contractors who have worked on projects through this program. The contractor must be able to write up an estimate of the cost and timeframe required to finish the project. The lender must assess the contractor's capacity to accomplish the work competently, promptly, and within the allotted budget.

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.

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