Are you purchasing an older home with plans to renovate? If so, the HUD FHA 203k home loan may be the right choice for you. There are strict requirements on the types of renovations covered by 203k loans. Bath remodels and kitchen renovations are approved property improvements with a 203k loan. Larger renovations may be made but the loan type will determine the type of approved renovation. Benefits of this loan are that remodeling can occur as soon as you purchase your home. You receive the funds to remodel at the closing of your home, and renovations must be completed within six months.

Another requirement is that the contractor must be HUD 203k qualified. This requires many qualifications on the end of the contractor to verify themselves as a legitimate contractor. They must provide financial, reference and background information for government approval. Most home renovating contractors won’t touch 203k home renovation projects.