What is FHA 203(k) Streamline?

Last Updated 9/19/2014

If you are hoping to renovate or remodel your home, the FHA Streamline 203(k) can be a fast and easy way to acquire these essential funds. The FHA 203K Streamline program lets you include remodeling funds with your original mortgage balance. These additional funds may be applied to simple repairs that don’t require an architect or licensed engineer’s involvement or plans; however, for larger construction projects, you should apply for the standard FHA 203(k) loan.

Through this unique borrowing opportunity, the FHA eliminates the need for homeowners to immediately apply for a home equity loan to fund home repairs. Instead, the home mortgage and remodeling funds are managed under a single, convenient loan. In addition, the FHA Streamline 203(k) program can be used to purchase or refinance a single family home, provided it is used as a primary residence. For FHA 203(k) loans, borrowers have the option of getting a fixed or adjustable rate on their loan.

Eligible Repairs for a 203k Loan

Here’s an example of the repairs that can be made using FHA 203k Streamline funds:

  • Painting, both exterior and interior
  • Replacement windows/doors
  • Upgrades to plumbing and electrical systems
  • Add or repair gutters and downspouts
  • Replace or repair flooring
  • Purchase new kitchen a3ppliances
  • Roof repair or replacement
  • HVAC system upgrade/replacement
  • Energy conservation improvements such as insulation and weather stripping
  • Improvements to accommodate residents with handicaps or disabilities
  • Non-structural remodeling

Ineligible Repairs

  • Major remodeling, such as the relocation of a load-bearing wall
  • New construction such as room additions, deck or patio construction
  • Structural repairs
  • Repairs requiring architect or engineer drawings or exhibits
  • Landscaping or amenity improvement
  • Any project requiring a work schedule greater than 6 months
  • Remodeling assignments involving more than 2 payments per specialized contractor
  • Projects that make the house uninhabitable during the time of renovation

Eligible Property Types

FHA 203(k) loans cover single family homes, buildings with one to four units, and larger buildings to be converted to have four or less units. In addition, condominium units may be eligible but only for interior repairs and improvements. For buildings divided into residential sections and commercials sections, FHA 203(k) loans can only be used for the residential segment of the building.