203(k) loans have guidelines associated to them that determine how much you’re allowed to borrow for renovating and home improvements. The two types of FHA 203(k) loans are: the limited – also called the “streamline” and the standard. You also have the option to refinance with both of these loan types.
Limited and standard 203(k) loans have different guidelines about borrowing limits for renovations and what you can use the money for. I you want to make an improvements that are deemed for luxury like: swimming pools, outdoor kitchens, generally you wont be able to use the money.
203(k) standard loan: The minimum cost of the renovation must be at least $5,000, and if it is a major repair that is structural, this is considered eligible. A HUD consultant must be available to oversee the project and restoration process.
203(k) limited loan: Loan up to $35,000 for renovations, major structural repairs are not considered eligible here.
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