FHA 203(k) Program:

The FHA 203(k) Program provides a single-close loan that enables a qualified borrower to purchase a home that may need repairs or to refinance an existing home for the purpose of remodeling. The Streamlined FHA 203(k) program allows the borrower to finance a maximum of $35,000 to make improvements. Both programs generate the necessary funds for renovation by financing the as-completed value of the home, rather than the present value.

• Purchase and rate/term refinance on primary residences that are 1- to 4-unit properties
  
• Up to six months for rehabilitation
• With FHA 203(k) rehabilitation lending, borrowers have a convenient alternative to a closed-end second mortgage or HELOC for repairs, renovations and improvements.
   

• One underwriting review and one closing for rehabilitation construction and permanent financing
  
• Loan based on the as-completed value of a home
  
• Down payments as low as 3.5% are allowed — family members may pay all of the borrower’s required down payment, closing costs, prepaid expenses, and discount points.