203(k) Loans With FHA Home Renovation

What is the FHA 203(k) Home Renovation Loan?

One of the most popular and diverse home improvement loans in Knoxville is the FHA 203(k) renovation mortgage. You can make home improvements to the house you want, or the home you already own. Use the funds for simple upgrades to your home like a kitchen or bath improvement, or even to completely reconstruct a home that is presently uninhabitable. You can even use an FHA 203(k) loan to tear down an existing structure and build a new one using some portion of the existing foundation. You can borrow up to 96.5% of the appraised value based on the value when the improvements or repairs are completed. There are two different 203(k) loans available. Choosing which loan suits you best will depend on the amount of improvement your property needs. The home must be your primary residence.

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With the FHA 203(k) you can:

  • Replace a roof
  • Re-side the home
  • Re-paint inside/outside of the house
  • Replace appliances
  • Remove an unwanted pool
  • Put in new flooring
  • Build or replace a deck/patio/porch
  • Replace windows
  • Remodel the kitchen
  • Repair or replace the septic system

You have 2 options with the FHA 203(k) loan:

The Standard 203(k) is an all-in-one loan used when homes need major rehabilitation, or when repairs are structural, involves landscaping, or when the renovation costs exceed $35,000. There must be a minimum of $5,000 worth of repairs, and again, the borrower must occupy the property. FHA loan limits are based on property type and location of the property being financed. A portion of the loan proceeds are used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. You may also roll in up to six months of mortgage payments if the HUD consultant determines you need to be displaced from the home during the repairs.

  • Move a load-bearing wall to open up a floor plan
  • Termite damage repair like replacing the sill plate
  • Basement waterproofing (structural)
  • Major landscaping issues like correction of grading
  • Sidewalk or driveway repair (health & safety)
  • Finish an attic


The 203(k) Limited is an all-in-one loan used for homes that need minor repairs. It allows borrowers to finance the purchase of an existing home and make improvements or upgrades up to $35,000 before move-in. There are no minimum repair costs and the borrower must occupy the property.

  • Kitchen remodeling including new appliances
  • Exterior and interior paint
  • Basement waterproofing (non structural)
  • New flooring (carpet, tile, laminate)
  • Septic system and well repair or replacement
  • Window and door replacement

Get Your 203(k) Information Below!