FHA 203k renovation
Buy the house — and roll the renovation in.
The FHA 203k renovation loan lets you buy or refinance a home and finance eligible repairs or improvements into the same mortgage. One loan, one closing, one monthly payment. It is one of the most useful programs for buyers looking at older Detroit homes that need work.
What is an FHA 203k loan?
A 203k loan is a special version of the standard FHA mortgage that adds renovation funds to the loan amount. The lender releases funds in draws as work is completed, based on a contractor scope and appraisal that accounts for the after-improved value of the home.
There are two versions: the Standard 203k (for major structural or larger-scale rehab, no cap in most cases but subject to FHA loan limits) and the Limited 203k (for cosmetic and non-structural work, up to $35,000 in renovation costs).
Standard vs. Limited 203k
The Limited 203k is designed for non-structural work — new floors, paint, kitchen and bath updates, roof replacement, HVAC. It has a $35,000 renovation cap and a simpler draw process. Most homeowners use the Limited 203k.
The Standard 203k is designed for larger projects that include structural changes — additions, foundation work, major layout changes. It requires a HUD-approved 203k consultant and has a more involved draw and inspection process.
How the funds work
At closing, the purchase or refinance amount plus the estimated renovation cost are combined into one loan. Renovation funds are held in an escrow account and released in draws as the contractor completes stages of work. Any unused renovation funds go toward the principal after the project wraps.
Key benefits
- Buy or refinance and finance repairs in one loan
- One loan, one closing, one monthly payment
- Limited 203k up to $35,000 for cosmetic work
- Standard 203k for larger structural rehab
- FHA-friendly credit and down payment requirements (3.5% down, 580+ credit)
Who this loan fits best
- Buyers purchasing older Detroit homes that need work
- Homeowners looking to renovate and finance improvements into a refinance
- Buyers who need HVAC, roof, kitchen, or bath updates rolled into the loan
Estimate your monthly payment
203k Renovation payment calculator
Estimate only. Actual rate, taxes, insurance, and mortgage insurance depend on your specific loan and property. Belong Lending confirms your exact payment at pre-approval.
Serving Detroit and surrounding Michigan communities
Belong Lending helps borrowers with 203k Renovation loans across Detroit, Troy, Southfield, Ann Arbor, Flint, Livonia, Warren, Sterling Heights, Farmington Hills, Novi, Rochester Hills, Dearborn, and beyond — plus additional coverage throughout Wayne County, Oakland County, Macomb County, Washtenaw County, Livingston County, Genesee County. We also lend on eligible properties in Ohio, Florida, Georgia, and Texas.
Frequently asked questions
What can I use FHA 203k funds for?
Eligible uses include kitchen and bath remodels, roof replacement, HVAC systems, flooring, paint, plumbing and electrical updates, accessibility modifications, appliance replacement, and structural additions or repairs (Standard 203k only). Luxury items like swimming pools and outdoor kitchens are typically not eligible.
What is the difference between Standard and Limited 203k?
Limited 203k is capped at $35,000 in renovation cost, has no structural work, and uses a simpler draw and inspection process. Standard 203k has no fixed renovation cap (subject to FHA loan limit), allows structural work, and requires a HUD-approved 203k consultant.
Can I do the work myself?
In most cases, no. 203k loans require a licensed, lender-approved general contractor. Self-help provisions exist but are rare and require the borrower to prove qualifications to the lender.
How long do I have to finish the renovation?
Most 203k loans allow 6 months to complete the renovation, with extensions available if the lender approves. Work should start within 30 days of closing.