Georgia FHA 203K Lenders – Georgia FHA 203 Loans

Advantages to the FHA 203K home loan

Not every Georgia home is move-in ready. The FHA 203K Renovation Loan allows you to expand your home exploration and design the Georgia home you want. The FHA 203K Renovation Loan combines the cost of buying the Georgia home with the cost of making repairs.


The advantages to using the FHA 203K loan to purchase your next Georgia home include:

  • Ability to explore more Georgia home choices for purchase.
  • Personalize the home with FHA 203K home improvements.
  • Single loan for financing the mortgage, repairs & upgrades, based on the As-Improved value of the home.
  • Immediately adds value (equity) when you purchase a Georgia home.
  • Make additions/improvements to your current Georgia home instead of moving in.


Georgia 203K Guidelines

  • •Fixed Rate – 30 year term – purchase or refinance
  • •Can be coupled with:

–      An energy efficient mortgage (EEM),

–      The Good Neighbor Next Door program (GNND), and

–      The HUD REO program

  • •The property must be a structure that has been completed for at least one year
  • •Attached/Detached SFRs and PUDs
  • •FHA-approved Condos – Streamlined interior unit upgrades only (Condos are not eligible on the 203(k) Full)
  • •2-4 Units
  • •HUD REO Properties
  • •Manufactured homes not eligible
  • •Loan-to-Value is based on the lesser of:
  • •The sales price or “as is” appraised value + repairs OR
  • •110% of “as completed” appraised value (100% for condos)
  • •Base loan amount cannot exceed 110% LTV/CLTV

Georgia FHA203K Occupancy

  • •Owner Occupied Only.
  • •Construction must BEGIN within 30 days of closing.
  • •All rehabilitation must be completed within 6 months of closing.
  • •The borrower cannot be displaced from the property (for more than 30 days for Streamlined or 6 months for Full) during the rehabilitation period. Examples of work that may cause them to be displaced:

–      Properties that will not have running water – plumbing repairs that would require the water to be shut off for long periods of time

–      No electricity – electrical repairs that would require the electricity to be shut off for long periods of time

–      Missing roof

–      No heat source


Georgia FHA 203K Renovation Amount


  • •A minimum of $5,000 in basic repairs from eligible list is required.
  • •No maximum renovation cost.

FHA 203K STREAMLINED Note 203k streamlined fees take a large portion of the $35000

  • •No minimum in renovation cost is required.
  • •Maximum $35,000 for total renovation escrow (inc. fees) which equates to $30,900 available for actual repairs.

FHA 203k Allowable Renovation Costs

  • •Actual cost of the renovation based on plans, specifications and accepted contractor’s contract stating scope of work, cost of materials and labor, timeframe for start, and completion of work.
  • •A Contingency Reserve is required equal to 10% to 20% of the actual amount of repairs. If utilities are not turned on at time of the inspection, an additional contingency reserve is required.
  • •Allowable construction related fees and costs.
  • •Inspection/Title Update Fees
  • •Independent Consultant Fees
  • •Permits and Other Fees
  • •Discount Points on Repair Costs
  • •FULL Only – Architectural/Engineering Fees
  • •FULL Only – If the property is uninhabitable escrowed mortgage payments (PITI) for up to six months during the renovation period.

Georgia FHA 203K Eligible Improvements – STREAMLINED

ü  Kitchen or bath remodels

ü  Purchase and installation of certain appliances.

ü  Repair/replacement of roofs, gutters and downspouts.

ü  Repair/replacement of plumbing and electrical systems.

ü  Repair/replacement/addition of exterior decks, patios, porches.

ü  Replacement of window and doors and exterior wall re-siding.

ü  Pool repairs up to $1,500 total for health and safety items.

ü  Repair/replacement/upgrade of existing heating, ventilation & air conditioning systems

ü  Repair/replacement of flooring.

ü  Exterior and interior painting.

ü  Energy efficient improvements.


Georgia FHA 203K Include All of the STREAMLINED items plus:

ü  Structural alterations and additions to structure

ü  Foundation repairs

ü  Major landscape work

ü  Completion of un-permitted structures (green house for example)

ü  The correction of grading and drainage problems is also acceptable

ü  Repair of existing walks and driveway is acceptable if it may affect the safety of the property

Please note: the mortgage must include at least $5000 for basic improvements to the existing structure on the property (please see Plaza guidelines for a comprehensive list of eligible repairs).


Ineligible Improvements – STREAMLINED

×     Structural repairs, rehabilitation or improvements such as load bearing walls, foundation repair or flooring support joists are a few examples.

×     Improvements or changes that were not approved prior to the start of the work

×     Materials or work performed prior to the first draw disbursement

×     Landscaping

×     Repairs to detached structure

×     Recreational & Luxury Items

×     Outside concrete work e.g. driveways and sidewalk


Ineligible Improvements – FULL

×     Tear downs or homes that will be demolished as part of the rehab

×     Moving a house from another location onto the subject property

×     Completion of an already underway construction project (i.e. builder standing inventory)

×     Improvements that result in commercial use or are commercial in nature

×     SFR dwelling converted to 2-4 unit property

×     2-4 unit property converted in to SFR dwelling

×     Recreational & Luxury Items



  • •Self help is not allowed if borrower is acting as the General Contractor for multiple trades.
  • •Interior/exterior painting. Borrower can provide labor only.
  • •Home Depot or Lowe’s labor and installation of appliances, cabinetry, etc.

–      Even though a contractor is doing the work, the specific contractor is not usually identified until the work begins. Because we cannot provide the required contractor information prior to close, these borrowers are considered “self-help” borrowers and must sign a Self-Help Agreement.

  • •If the borrower is a contractor, they can perform their own work. Plaza will pay for materials only.

–      Increased contingency and additional conditions may apply.

–      All other contractor requirements apply.


Energy Efficient Options

  • •Up to $8,000 in energy efficient improvements can be added on top of the 203k limit.  The EEM improvements will be based on the lesser of 5% of the property value (after improved) or $8,000.
  • •100% of the EEM improvements may be financed.  The LTV calculations apply only on the 203k streamline loan before adding the EEM amount
  • •An energy rating report (HERS) is required for all EEM items included
  • •In addition to up to $8,000 in EEM items – the borrower may finance an additional $2,000 for weatherization repairs
  • •Total additional financed improvements can be as high as $45,000 on the streamline 203k loan including the $8,000 EEM and $2,000 weatherization items.
  • •Must be cost effective:

–      The monthly energy savings must be greater than the payment increase  based on a CEC approved Certified HERS (Home Energy Rating System) Rater


How HERS Works

  • •Home energy ratings involve an on-site inspection by a residential energy efficiency professional – a home energy rater. Home energy raters are trained and certified by a RESNET accredited home energy rating system.
  • •Find a Professional Home Energy Rater at:




EEM and Energy Efficient Appliances

  • •Great add on for those needing new appliances
  • •New Appliances (Range and/or Oven, Range hood, Microwave,  Refrigerator, Trash Compactor and Washer/Dryer – built in or Free Standing)
  • •Can finance to purchase
  • •Reimbursed 100 % with final draw

Contractor Bids and Guidelines

A HUD consultant is required on all Full 203(k) transactions for the purpose of completing the Work Write-Up/Cost Estimate and the required architectural exhibits for borrower. All consultants must be HUD approved.  Refer to HUDs website for a list of approved consultants. https://entp.hud.gov/idapp/html/f17cnsltdata.cfm .


Role of the HUD Consultant – FULL Only

  1. Site Visit – HUD Consultant meets with borrower at site and does a Work Write Up and provides a Blank Bid of Repair. Borrower pays appropriate fee at the time of the meeting with the HUD Consultant.
  2. Prepare the Work Write-Up and the required architectural exhibits for borrower. Consultant delivers the Report Package to borrower, lender and contractor.
  3. HUD Consultant performs Draw Request Inspections:
  • •1st draw: consultant insures permits were issued
  • •2nd and 3rd draw: inspections are performed as work progress
  • •4th draw: punch list is established
  • •5th draw: project is closed out and warranties and lien releases collected

HUD Consultant Costs – FULL Only


Please note: There may be additional charges for things such as mileage, additional units, draw requests etc.

Contractor Requirements

Contractor to provide:

  • •License
  • •Bond
  • •Insurance
  • •W-9 (must be current year)
  • •Work History/Resume
  • •3 References
  • •Contractors who have employees must provide proof of workman’s comp insurance for all subcontractors doing work on the job site

–      Note: If the property is located in a state that does not require workman’s comp insurance, the contractor MUST be able to confirm they have at least $1 million in liability insurance.


Licensing Requirements

Contractor is REQUIRED to have a professionally specific license – no exceptions:

  • •When including major electrical, plumbing, or HVAC
  • •Lead based paint or mold abatement repairs

If an unlicensed general contractor is using subcontractors for electrical or plumbing repairs, the subcontractor is required to provide a valid license for their profession.


Contractor Bids – STREAMLINED Only

  • •The contractors bid or cost estimate must clearly state the nature and type of all repairs and the cost itemization for each repair. The cost estimates must be reasonable based on the nature of the repair and the size of the home.
  • •Each repair should also be broken down to include:

–      Specific location of repairs (i.e. master bathroom vs. hall bathroom, rear exterior wall)

–      Material list including descriptions and quantities

–      Linear feet or size of item being removed or replaced

–      Breakout between labor and material costs

  • •Any additional repairs required by the appraiser must be included on the bid.
  • •Contractor’s Name, Address, Phone Number, and License Number
  • •Borrower’s Name and Address
  • •Signed by all parties

Contractor Bids – FULL Only                

Bids are provided by the HUD Consultant in the Work Write Up

Bid must include:

ü  Must be provided on contractor letterhead

ü  Include Contractor’s address info and license

ü  Borrower(s) name and property address

ü  Signed and dated by all parties

ü  Repair descriptions

ü  Cost for materials and labor

ü  Permits

ü  Bid includes total repair amount for each section and a grand total

Specific details such as color, make, model not required unless non-standard units.

Must match the Homeowner/Contractor agreement



  • Step 1: Borrower Finds a Property
  • Step 2: Review the Purchase Contract
  • Step 3: Borrower and HUD Consultant Meet at Property
  • Step 4: Obtain Plans and Specs
  • Step 5: FHA Case Number Assignment
  • Step 6: Home Owner and Contractor Agreement
  • Step 7: Disclosing Fees Correctly on GFE
  • Step 8: Order appraisal
  • Step 9: Underwriting
  • Step 10: Closing
  • Step 11: Renovation Begins (5 draws for full 203(k))
  • Step 12: Final Inspection Completion


· Loan Officer should ask the selling agent to check comps to confirm the after value is supported

· Borrower to select an FHA HUD consultant to inspect the property and determine what repairs are needed to meet HUD’s minimum property standards. The borrower(s) will indicate any work they wish to have done at the time of inspection.

· The appraisal cannot be ordered until the HUD consultant has prepared a SOR (Specification Of Repairs) or a Feasibility Study which includes the cost estimate for the completion of the project.

· Borrower selects the contractor(s). Contractor submits the necessary paperwork to PHM for approval.

· All parties – HUD consultant, borrower(s) and contractor(s) sign the SOR or Feasibility Study.


Timeline Reminders

  • •Closing is typically 45 – 60 days after the appraisal is ordered. Set this expectation with all parties
  • •The appraisal cannot be ordered until the HUD Consultant has prepared a Work Write Up which includes the cost estimate for the completion of the project
  • •The work must begin within 30 days of execution of the Agreement
  • •The work must not cease prior to completion for more than 30 consecutive days
  • •The work is to be completed within the time period shown in the Agreement not to exceed 6 months.

Georgia FHA 203K Information Links

HUD Handbook

203(k) Rehab Mortgagee Letters

HUD Consultant Search Tool


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