Our free 203k contractor matching service makes it easy.
Finding a prequalified 203k contractor who is held to the highest industry standards is simple with Contractor Connection. Just select your project type and enter your ZIP code below to get a free, no-obligation estimate.
Why use our 203k contractor network to rehabilitate your property?
• We’ve already vetted every contractor in our network and verified that he or she is fully qualified, licensed, and insured.
• There’s no cost for using our service — you pay only for the work your contractor performs through your 203k loan.
• You have access to easy online estimates, project tracking, and customer service.
• Every contractor’s workmanship is warranted for a full five years.
The facts about 203k loans.
Section 203k loans from the Federal Housing Administration are a convenient option for borrowers who want to bring a property in disrepair back up to code compliance. These loans allow borrowers to finance the purchase of a property or refinance a current mortgage while including the cost of repairs in the loan.
The property must be used by the homeowner as his or her primary residence, which may be a detached home, townhouse, condominium, mixed-use residential/commercial space, or a few other types of properties.
Obtaining a 203k loan is done through HUD-approved lenders and are insured by the Federal Housing Authority. The amount of the loan is based on the estimated value of the property once the renovations have been made, as well as the cost of the work itself. A portion of the loan pays for the purchase of the property, while the remainder is put in escrow and paid out in increments as work is completed.
There are some restrictions on how 203k funds can be used — luxury items such as swimming pools and improvements for commercial use aren't eligible. Loan requirements dictate that safety-related upgrades, modernizing, and correcting building code violations must be completed before additional improvements, such as cosmetic changes, can be done.
Section 203k loans are usually offered as adjustable-rate mortgages or 15- or 30-year, fixed-rate mortgages. There are two types of 203k mortgages:
• The Streamlined 203k is used for simpler projects with rehabilitation costs under $35,000.
• The Standard 203k is for more complicated projects that may require engineering inspections, architectural drawings, or significant structural changes.
Hiring a 203k contractor.
It's important to ensure you hire an experienced 203k contractor for your project. Here's why:
• A contractor whose 203k experience, licensing, insurance and references cannot be verified — or who don't satisfy other standards set forth in the loan — will not be considered by lenders.
• Section 203k loan can be more complicated than other types of mortgage loans. The types of repairs or additions and the type of property must fit certain requirements.
• Bids for 203k-funded projects must be predetermined by a final estimate before the loan is closed.
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