203(k) renovation
FHA 203(k) renovation loans
One loan, one closing, one payment — covering both the purchase price and the renovation budget for a Texas home that needs work.
What it is
The 203(k) program lets you borrow based on the home's value after improvements rather than its current condition. The Limited 203(k) handles up to $75,000 in non-structural repairs — kitchens, baths, roofing, flooring, HVAC. The Standard 203(k) has no set repair cap and allows structural work, additions, and full gut rehabs, with a HUD consultant overseeing the scope and draws. Renovation funds are held in escrow and released to your contractor as work is completed.
Who it's for
- Buyers competing for older or distressed Texas inventory
- Homeowners who want to renovate but lack cash or home equity
- Buyers of homes that failed a standard FHA appraisal on condition
- Anyone who would otherwise need a separate high-rate renovation loan
The 3.5% down rule, in plain English
FHA's headline benefit is a 3.5% minimum down payment with a credit score of 580 or higher. Below 580, the minimum is 10%. Down payment funds can come from savings, a documented gift from family, or an eligible Texas down payment assistance program. FHA also allows a higher debt-to-income ratio and shorter waiting periods after a past credit event than most conventional programs.
Qualification checklist
- 3.5% down based on the total acquisition plus renovation cost
- Licensed, insured contractor with a written bid and timeline
- Repairs must begin within 30 days and finish within program timelines
- Standard 203(k) requires a HUD consultant
- After-improved value must support the total loan amount
This site is not affiliated with or endorsed by HUD, the FHA, or any government agency. Rate and payment examples are estimates for illustration only. Rates are subject to change and this is not a commitment to lend. Actual APR depends on credit, occupancy, loan amount, and property details.