Using an FHA 203(k) Loan to Refinance Your Home

If you already own your home, you can still take advantage of an FHA 203(k) loan to fund major renovations or improvements. This renovation refinance loan allows current homeowners to refinance their existing mortgage while incorporating renovation costs into the new loan. The process is similar to a traditional refinance but with additional requirements to cover the cost of repairs.

Refinanced house using FHA 203(k) in College Station TX

Here’s how it works:

  • A portion of the loan funds will pay off your existing mortgage.
  • The remaining funds will be placed in an escrow account for renovations and upgrades.
  • Once the renovations are completed, the funds are used to cover the renovation costs.

If you previously financed your home with an FHA 203(k) loan, you may be eligible to refinance under the FHA limited program. This can help you secure a lower interest rate, potentially reducing your monthly payments while still making home improvements.

 

FHA 203(k) Pros and cons ➡