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Section 203(k) insurance enables homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home. Purpose: Section 203(k) fills a unique and important need for homebuyers.
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HUD has a detailed list of standards that a 203k contractor must meet, which is why it is highly recommended that you work with a General Contractor who has experience with FHA 203k loans. The selection of an experienced, 203(k) contractor is one of the most important decisions a borrower can make during the FHA 203(k) loan process.