Top 203 (k) Rehab Mortgage Lenders in 2021



If you are buying a home in need of improvement, you can get financing for both the purchase and the renovation through FHA Loan 203 (k), also known as a rehab loan. This type of FHA loan makes life easy with one loan, one set of closing costs and one monthly mortgage payment. Here is Bankrate’s guide to the top 203 (k) mortgage lenders in 2021.


To determine the best FHA 203 (k) mortgage lenders for rehabilitation, Bankrate ranked lenders on several criteria, including affordability (annual interest rate and fees); the volume of loan offers; and online capabilities.

Best mortgage lenders for FHA 203 (k) rehabilitation


LoanDepot offers some of the most competitive rates and streamlined process, closing loans 50 percent faster than the competition. This is in part because the lender is using asset verification technology instead of requiring borrowers to send documents by mail or fax.

While LoanDepot has online services, the lender also has 200 branches if you’d rather consult a loan officer in person. For an FHA loan, it accepts a credit rating of 580.

New American funding

New American Funding offers a variety of mortgage products in 49 states (excluding Hawaii) and Washington, DC. One of the benefits of working with New American Funding is that the lender manually underwrites the loans, taking a closer look at the broader financial position of the borrower. a holistic approach instead of relying on automated underwriting. Because of this, if you have a lower credit rating or unique circumstances, you may have a better chance of getting approved for a loan.

You can apply for a loan from New American Funding online or at one of the lender’s many branches.

Home Loans Caliber

Caliber Home Loans, established in 2013, is an online mortgage lender offering a range of loan products throughout the United States. You can apply for a loan from this lender online or by phone.

In relation to FHA loans, the lender follows the FHA guidelines. To increase your chances of getting approved for a loan, you can provide additional documentation, such as a rental history, to prove creditworthiness. In general, you are more likely to get approval if you have an average or excellent score.

What is FHA 203 (k) Rehabilitation Loan?

An FHA 203 (k) loan is a type of FHA-supported mortgage for home buyers looking to renovate a home they are buying. 203 (k) loans generally have more competitive rates and require a lower down payment and a lower credit rating than other types of loans. Like other FHA mortgages, 203 (k) loans require you to pay your mortgage insurance premium along with your monthly loan payment.

How does loan 203 (k) work?

Loan 203 (k) consolidates your mortgage and repair funds into one loan. Once you close the loan, a portion of the proceeds is paid to the seller of the home, and the remainder goes towards repairs.

To be eligible for a 203 (k) loan, a home must be at least one year old and repair costs must be at least $ 5,000. In addition, the loan amount cannot exceed the FHA loan limit in the area, the value of the home after renovation, or its value before renovation, whichever is less.

You also cannot use the 203 (k) loan for any project. You will need to meet requirements for renovations that include replacing the roof and floors, improving your home for affordability reasons, or improving energy efficiency.

Who is eligible for a 203 (k) loan?

If you are interested in a 203 (k) loan, you need to fulfill the same requirements as for a standard FHA loan:

  • Minimum credit rating 580
  • Debt to income ratio (DTI) is 50 percent or less (individual lenders may have higher or lower requirements)
  • The house is your main residence and is being reviewed after the completion of the renovation.

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