FHA 203(k) Loan


DEFINITION of 'FHA 203(k) Loan'

A type of federally insured mortgage product for individuals who want to rehabilitate or repair a damaged home that will become their primary residence. In addition to the funds to cover the purchase price of the house, the FHA 203(k) loan provides the money needed for repairs and related expenses as part of the loan.


This loan has a low down payment requirement compared to private-sector mortgages and puts rehab projects within reach for individuals who otherwise could not afford them. Supporters of this type of loan say it helps improve communities and broadens home ownership opportunities for individuals; critics say that it's a risky loan product that isn't offered without government underwriting for a good reason.

  1. Uninsurable Property

    A home that is not eligible for insurance through the United ...
  2. Federal Housing Administration ...

    A United States government agency that provides mortgage insurance ...
  3. Fannie Mae - Federal National Mortgage ...

    A government-sponsored enterprise (GSE) that was created in 1938 ...
  4. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  5. Freddie Mac - Federal Home Loan ...

    A stockholder-owned, government-sponsored enterprise (GSE) chartered ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital ...
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  1. Do FHA loans require escrow accounts?

    Federal Housing Administration (FHA) loans require escrow accounts for property taxes, homeowners insurance and mortgage ... Read Full Answer >>
  2. Do FHA loans have prepayment penalties?

    Unlike subprime mortgages issued by some conventional commercial lenders, Federal Housing Administration (FHA) loans do not ... Read Full Answer >>
  3. Can FHA loans be refinanced?

    Federal Housing Administration (FHA) loans can be refinanced in several ways. According to the U.S. Department of Housing ... Read Full Answer >>
  4. Can FHA loans be used for investment property?

    Federal Housing Administration (FHA) loans were created to promote homeownership. These loans have lower down payment requirements ... Read Full Answer >>
  5. Do FHA loans have private mortgage insurance (PMI)?

    he When you make a down payment from 3 to 20% of the value of your home and take out a Federal Housing Administration (FHA) ... Read Full Answer >>
  6. How many FHA loans can I have?

    Generally, the Federal Housing Administration (FHA) does not insure more than one mortgage per borrower. This is to prevent ... Read Full Answer >>

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