FHA 203k Down Payment

The HUD FHA 203K loan, used for purchasing and renovating a property, requires a minimum down payment of 3.5%, similar to the FHA 203(b) loan that doesn't include additional rehab funds. However, the calculation of the down payment differs for the FHA 203K loan.

The down payment calculation is based on the following factors:

1. The “Contract Sale Price”
2. The “Repair-Rehab-Renovation Amount” being requested along with Reserves and all allowable costs associated with the improvements
3. Once step 1 & 2 are combined, you can then calculate the 3.5% off that total to find out how much you’ll need to put down.

What Is the Minimum Down Payment for an FHA 203K Loan?

For an FHA 203K loan, your minimum down payment is 3.5% of a Combined total. This total includes the home’s purchase price, the cost of repairs, required reserves (for any unexpected expenses) and related renovation fees—such as, inspections, title updates, and consultant fees if a 203K consultant is used. Once that total is figured out, you can then calculate the 3.5% to find out your minimum down payment.

FHA loans are well-known for their low down payment requirements, but did you know that the down payment can also come from gifted funds? That’s right! You can purchase your new home with the lowest down payment available, and it can even be provided by someone else. Additionally, the seller can cover the closing costs.

If you're in the market to buy a property, an FHA 203K Loan might be the perfect option for you. With its low down payment, low interest rate, and "All in One" financing, a 203K loan allows you to transform the house you're buying into the home you've always wanted—without depleting your savings.