FHA vs Conventional Loans

FHA vs Conventional Loans

There are several differences in FHA vs Conventional loans. Here is a quick comparison:

FHA Disadvantages

Conventional Disadvantages

FHA 203(k) Loans

There are several different variations of the 203k rehab loan. We will discuss them in this section.


HUD HUD has developed a new FHA insured mortgage program called the 203k Limited Repair Program that permits home buyers to finance up to an additional $35,000 for TOTAL repair cost into their mortgage, to purchase and improve or upgrade the home before move-in, or to refinance an existing mortgage and add up to $35,000 for repairs or improvements.

With this new product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

The following repairs can be financed with this program:


The Standard 203(k) program offers everything that can be completed in the Limited 203(k) program, but even more.

The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5,000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place.

The types of improvements that borrowers may make using Section 203(k) financing include:

Another added benefit of the Standard 203(k) loan, is in the event that the home will be uninhabitable during renovation, you can finance up to 6 mortgage payments into the loan, while waiting for the home to be in a condition that is it inhabitable again. (Restrictions do apply).