The FHA’s 203(k) loan program allows borrowers to finance the cost of home improvement projects through their mortgage. This can be a great way to make much-needed repairs or renovations to your home without having to come up with all the cash upfront. 

However, some strict guidelines must be followed to qualify for the loan. This article will outline the requirements for remodeling your kitchen under the 203(k) program.

What Are the Types of FHA 203(K)?

There are two types of FHA 203(k) loan: the standard 203(k) loan and the limited 203(k) loan. The standard 203(k) loan is for major rehabilitation projects, while the limited 203(k) loan is for less extensive repairs. The type of loan you should get depends on the scope of the project. 

Tips to Successfully Navigate the FHA 203(K) Loan Process

1. Work with an Approved Lender

To get an FHA 203(k) loan, you must work with a lender that the Department of Housing and Urban Development (HUD) approves of. There are a few things that lenders will need to show to be approved, including experience with the 203(k) loan program and a willingness to work with the FHA.

2. Purchase a Primary Residence

The home you purchase must be a primary one. This means that you will live in the home as your primary residence and that the home will not be used as an investment property.

3. Know the Borrower Limits

How much you can borrow with an FHA 203(k) loan is limited. The maximum loan amount is based on the lesser of the home’s value or 110 percent of the after-improved value. The minimum loan amount is $5,000.

4. Know the Rehabilitation Limits

There are limits to the amount that can be spent on rehabilitation. The maximum rehabilitation amount is $35,000 or the lesser of the home’s value or 110 percent of the after-improved value, whichever is less.

5. Learn More about Down Payments

An FHA 203(k) loan requires a 3.5 percent down payment for those with a credit score of 580 or higher and a 10 percent down payment for those with a lower score.

7. Know Your Debt-to-Income Ratio

Your debt-to-income ratio (DTI) must be less than 43 percent to qualify for an FHA 203(k) loan.

What Are the Benefits of the FHA’s 203(K) Loan Program?

The FHA’s 203(k) loan program is a great way to finance the purchase and renovation of a home. With this program, you can buy a fixer-upper and finance the repairs with a single loan. This can save you time and money, as you won’t have to take out separate loans for the purchase and repairs.

With 203(k) loan program, you can get a lower interest rate than a traditional home loan. Additionally, the 203(k) loan program allows you to finance up to 110 percent of the home’s value. This can give you the cash you need to make repairs and upgrades.


The 203(K) guidelines can be a great way to finance your kitchen remodel. By working with an HUD-approved 203(K) consultant, you can streamline the process and make sure that your renovation is completed according to code. With some planning and care, you can have the kitchen of your dreams without breaking the bank.

The loan consultant will become your partner during the 203(K) process for a kitchen remodel. They can act as a point of contact between you, the contractor, and the lender. 

If you are looking for a loan consultant, trust only Clayson Mortgage. We will be there for you throughout the 203(k) loan process in Utah. Our team is dedicated to guiding our clients through the process. Contact us for more application details!