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203K streamline advice

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Thread Starter
Freshman Member
Oct 17, 2008
Professional Status
General Public
I've been browsing these boards trying to gather information. I am in the process of purchasing a home under 203K streamline. It has a lot of problems and the major stuff I have planned on financing.
Remodel bath, new water heater, new hvac, repair roof.

I'm trying to put off minor problems so that I can tackle them on my own schedule once I am in the house. I've had a home inspection which overall was good. But I'm worried about what all the FHA appraiser is going to require. There were some little things on the list like window glazing hand-rail, minor drainage problems etc.

Windows are operational but are smaller than current building codes require

The ceilings are water damaged, but the structure is solid. I plan on replacing the worst part, but can I leave the other rooms with stained ceilings and address it later?

There is water damage under the kitchen sink (bottom of cabinet rotted through). I hope to leave this until I can do a total kitchen rehab.

Carpets are old and dingy, under that it's just a concrete slab. I want to wait and put in wood after other renovations are done. Will an appraiser require me to take out carpet? Is concrete acceptable ?

The place has generally not been taken care of. It is very dirty, and once I am in there it will be immediately cleaned from top to bottom I just don't want to waste money paying someone else to do it.

Some electrical wiring was probably done without a permit at some point, but my home inspector says everything checks out for the most part (grounds, reverse, etc) it needs some Gfci breakers.
However, there is a hole in the wall above the breaker box where the wiring can be seen.

Do you think that any of these things will be a significant problem that I should go ahead and get bids on?

Thanks for any help you can offer.

Mike Boyd

Elite Member
Jan 18, 2002
Professional Status
Retired Appraiser
First, make sure your lender will participate in a 203K. Many will not. Typically, FHA will require you to submit a written plan for all the work you plan to do. Then, they will require you to get a bid and contract for that work from a licensed contractor. Then, they will first assign an FHA approved consultant to review the plans, the contract, the contractor's cost breakdown. The consultant will then inspect the house to confirm that the work is needed or if MORE work is necessary. THEN, they will order an appraisal....maybe two appraisals: one "as is" and one "subject to completion." A before and after concept. You cannot get 203K financing for improvements that are basically COSMETIC. Or, for amenities such as a swimming pool, tennis court, etc. The cost of the repairs will be funded as they are made. I think the maximum time for completion is 2 years (but check on that...this may have been changed.)

Keep in mind, ALL health, safety and structural issues must be corrected for ANY FHA loan. Also, things that might possibly affect the structural integrity of the house would likely have to be corrected (such as drainage problems). You will also need a pest report and any infestation and damage will have to be corrected. I would make certain that your lender is a Direct Endorsement lender approved by FHA. You can look that up, as well as a complete rundown on the 203K program on the Internet at FHAloans.gov.
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