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The video puts this in more visual terms, but 203(b) is the most commonly used FHA program. It offers a low down payment, flexible qualifying guidelines limited lender’s fees, and a maximum loan amount.
203(k) loans enable homebuyers to finance both the purchase and rehabilitation of a home through a single mortgage. A portion of the loan is used to pay off the seller’s existing mortgage and the remainder is placed in an escrow account and released as rehabilitation is completed.
Basic guidelines for 203(k) loans are as follows:
The 203(k) loan must follow many of the 203(b) eligibility requirements. Lenders will know specifics about improvement, energy efficiency, and structural guidelines.