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FHA standard 203k loan vs streamline 203k loan


FHA 203k loans

A FHA 203(k) loan may be used to finance renovations and repairs for a home you’re buying or refinancing. There are two types of 203(k) loans: the Standard 203(k) loan and the Streamline 203(k) loan (also referred to as the Limited 203(k) loan.

The Standard 203k loan

The Standard 203(k) loan may be used for just about any remodeling and repair costs as long as the existing foundation remains in place. The amount of your loan for renovations must be at least $5,000 and as part of the process of getting approved for the loan, you must use a 203(k) Consultant.

The Streamline 203k loan (aka Limited 203k loan)

As the name suggests, the Streamline or Limited 203(k) loan is streamlined and limited—in how much you can get in financing and what you can use the loan for. The maximum amount you may get financing for repairs and renovations is $35,000. Unlike a Standard 203(k) mortgage, there is no minimum cost. The loan may only be used to pay for non-structural, minor property repairs or improvements, such as remodeling the kitchen, painting the interior, purchasing new carpet, etc.

Also, unlike the Standard 203(k) mortgage, the Streamline 203(k) doesn’t require you use a 203(k) Consultant, which’ll save you some costs, but a Consultant may be used. Additionally, you must live in the property, and it cannot be vacant for more than 15 days.

Here’s a breakdown of the difference:

Detail Standard 203(k) Loan Streamline 203(k) Loan
Minimum renovation costs $5,000 None
Maximum renovation costs As much as needed and detailed in work plan $35,000
What you can use the loan for All repairs and renovations as long as foundation stays in place Minor, non-structural repairs and renovations
203(k) Consultant Required Not required
Must live in property during repairs No Yes (cannot be vacant for more than 15 days)