While they are both Federal Housing Administration mortgage loan programs, the 203(B) And 203(K) loans have some distinct differences.

203(b) is the most commonly used FHA program. It offers a low down payment, flexible qualifying guidelines, limited lender’s fees, and a maximum loan amount.

203(k) loans enable homebuyers to finance both the purchase and rehabilitation of a home through a single mortgage. A portion of the loan is used to pay off the seller’s existing mortgage and the remainder is placed in an escrow account and released as rehabilitation is completed.

Basic guidelines for 203(k) loans are as follows:

  • The home must be at least one year old.
  • The cost of rehabilitation must be at least $5,000, but the total property value – including the cost of repairs must fall within the FHA maximum mortgage limit.

The 203(k) loan must follow many of the 203(b) eligibility requirements. Lenders will know specifics about improvement, energy efficiency, and structural guidelines.


At Title Junction, we care about helping you stay informed throughout your real estate transaction. The experts at our title company have extensive knowledge about real estate not only in Cape Coral and Fort Myers, but all of Florida as well.

Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: How to Keep Your Home Safe from Intruders

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