What Is an FHA Section 203(k) Loan?

An FHA Section 203(k) loan is designed to help borrowers finance the purchase of an older or damaged home that needs significant repairs. The FHA Section 203(k) program is designed to promote the rehabilitation and renovation of single-family homes while increasing opportunities for people to become homeowners. The loan includes both the cost of purchasing an old or damaged home, and the cost of making necessary repairs or renovations.

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This loan is backed by the FHA and funded by 203(k)-approved mortgage lenders.