An FHA 203k loan is a type of government-insured mortgage that allows the borrower to take out one loan for home purchase and home renovation.
The loan amount is based on the price of the home and the estimated cost of the repairs, including labor and materials.
There are two main types of FHA 203k loans: the regular or standard 203k, which is for properties that need structural repairs, remodeling, or landscaping; and the limited 203k, which is for properties that need energy conservation improvements, new roofing, new appliances, or non-structural repairs. Other requirements or limitations may apply.
HUD Handbook 4000.1