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How A 203k Loan Can Help Secure Your Dream Home

If you’re looking to buy a home, you’re probably preparing yourself for the big financial decision you’re about to make. In the Syracuse area, the median home price is about $150,000, so this is definitely not the kind of purchase you make on a whim. In most cases, homebuyers will secure a loan or mortgage to be able to buy the property they’re interested in. While there are several options you can choose to secure the funds needed to purchase real estate, you might want to consider a getting a 203k loan in New York.

What Is A 203k Loan?

A 203k loan is a mortgage product backed by the Federal Housing Administration that allows homebuyers to borrow enough money to purchase a home and cover the costs of necessary repairs, including labor and materials. This allows homebuyers to purchase houses that may be in need of some repairs while only having to take out one loan for all the work. There are two types of 203k loans: limited and standard. The main differences of these two types is the amount you can borrow, the minimum costs for the loan, and the types of repairs they cover.


A limited 203k loan has an easier application because it is meant for renovations valued less than $35,000. There is no minimum cost requirement for this kind of 203k loan, but this won’t cover any structural repairs and is meant for minor work such as energy conservation improvements, roofing, flooring, painting, or bathroom and kitchen remodels. Disbursement of funds will be 50% up front and the remaining 50% after completion in six months. In some circumstances, you might be able to do some of the repairs on your own.


A standard 203k loan requires you to borrow a minimum of $5,000, but has a higher limit on how much you can borrow for repairs and renovations. Unlike the limited kind, the standard 203k doesn’t have a hard $35,000 limit and instead uses different rules to calculate the maximum amount you can borrow, which is still much higher than a limited 203k.

This kind of 203k loan is meant for major repairs and renovations including structural changes and additions like making a home handicap accessible. If you dream of having a front porch but the house you’re buying doesn’t have one, this will allow you to add one in and cover the costs all in one loan. A 203k consultant is required for this type of loan because the funds are disbursed over the course of six months as “draw requests” when repairs are completed.

In either case, changes and renovations that don’t result in a true upgrade in terms of function or enhanced attractiveness are not covered by this loan. This includes “luxury” add-ons such as pools, hot tubs, tennis courts, barbecue pits, and outdoor fireplaces.

Benefits Of A 203k Loan And Some Things To Consider

The main benefit of a 203k loan is that it allows a buyer to buy a home that is in need of repairs or even a home that you might not have considered because of possible repair costs. Since these kinds of loans are often used for properties that are already in need of repairs, this opens up the option of purchasing a home in a neighborhood that you might not have otherwise been able to afford.

This kind of loan is also backed by the government, and because of this, lenders are able to provide them at lower interest rates compared to other kinds of loans and down payment requirements are minimal. The required credit score is also relatively low and it covers mortgage payments if the home can’t be lived in during renovations. These rates and requirements can differ from lender to lender so it’s important to make sure you’re getting a good deal.

The only downsides to the 203k loan are that not all properties are qualified and repairs must be completed within six months. This kind of loan is also not for investors and is meant for those buying a home that they will occupy.

Need More Info?

If you’re looking to learn more about how to get a 203k loan in New York, let the team at Procopio Real Estate help you out. We help our clients with every step of the home buying process and connect you to our trusted partners to get you the 203k loan to help find and customize your dream home.