Financing Santa Cruz Homes: What is an FHA 203(k) Rehab Loan?

Posted by Lauren Spencer on Sunday, April 17th, 2011 at 11:01pm.

Have you ever heard of the 203k rehab loans offered through the Federal Housing Administration (FHA)?  If you’re rehabbing Santa Cruz homes, it might be just the loan you need. 

What is a 203(k) Loan?
The FHA developed the 203(k) program to help revitalize homes throughout the country.  This program provides insured loans that can be used to rehab, rebuild or modernize existing Santa Cruz homes.

What are the Benefits of a 203(k) Loan?
This is a one-stop loan, which means one loan finances both the purchase and rehabilitation of your property.

The mortgage amount is based on the projected value of the property after the work has been completed.  The mortgage takes into account the cost of the rehab including labor charges, permits, drawings, etc.  The mortgage can't exceed 110% of the "As Repaired Value."

FHA approved lenders can offer this program and it can be combined with other approved programs.

Who is Eligible for a 203(k) Loan?
This program is open to individuals as well as non-profit organizations.

What Properties are Eligible for 203(k) Loans?
The 203k loan can be used to purchase and rehab one- to four-family dwellings that have been completed for at least one year.  For all the additional eligibility requirements, carefully review the “Eligible Property” section on the web page about 203(k) loans.

If you’re looking at Santa Cruz homes to buy, whether you’re using an FHA loan or not, I can help.  Give me a call today at 831-662-6522 or email me at

For more information, please visit my website at


About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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