Can rehab loan be used for investment property?

There’s only one legitimate way to use a 203k loan for an investment property. You can buy and renovate – or construct or convert – a multifamily (2–4 unit) building and live in one of the units. FHA allows borrowers to purchase 2–, 3–, and 4–unit properties and renovate them using the 203k loan.

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Correspondingly, can I do my own work on a 203k loan?

Yes! You can finance repairs needed to pass an FHA inspection or desired repairs done by a professional. If there are DIY home improvements you want to tackle, simply don’t roll them into the bids for the work with the FHA 203k.

Beside above, can I refinance a 203k loan? Most people use the FHA 203k loan to buy a home, but it can be used for refinancing, too. As long as you have at least $5,000 in improvements, you can use this refi option. The lender will order an appraisal that shows two values: the “as-is” or current property value, and the “improved value” after renovations.

Also question is, is it hard to get a FHA 203k loan?

The FHA 203k loan requirements are similar to that of a standard FHA loan. All borrowers must meet the FHA credit score requirements. The minimum FICO score allowed is 500. All borrowers must have the minimum down payment of 3.5%, or 10% if the FICO score is below 580.

What are the cons of a 203k loan?


  • Only eligible for primary residences.
  • Mortgage Insurance Premium (MIP) required (can be rolled into loan)
  • Do it yourself work not allowed*
  • More paperwork involved as compared to other loan options.

What can you use a FHA 203k loan for?

What is a 203k loan?

  • The loan may be used for updating, modernization, or total renovation of your home.
  • You are able to combine renovation costs and first mortgage with either fixed rate or adjustable rate FHA 203k mortgage.
  • All repairs are done after closing the 203k loan.

What properties qualify for 203k loan?

Qualifying homes for a FHA 203k loan include:

  • A one- to four-family home that has been completed for a least a year.
  • A home that has been torn down, provided that some of the existing foundation is still in place.
  • A home that you want to move to a new location.
  • The home cannot be a co-op, but some condos are eligible.

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