By Phil Ganz
Edited by Ryan Skerritt
Starting November 4th, 2025, significant new FHA 203k updates are taking effect.
One major change allows you to include up to 12 months of mortgage payments in your loan. This means you can purchase a fixer-upper, access funds for renovations, and delay mortgage payments for up to a year after closing—a huge advantage for first-time homebuyers.
Additionally, HUD has raised the FHA 203k Limited Rehab loan limit from $35,000 to $75,000, marking the first increase since 1995. This update opens up exciting new possibilities for Florida homebuyers ready to renovate or upgrade their homes.
Verify Your FHA 203(k) Loan Eligibility
This article will provide clear answers to common questions and detail the changes for this year.
What is an FHA 203k Loan?
The FHA 203k loan is a government-backed mortgage program designed to help homebuyers finance both the purchase and renovation of a property in a single loan.
Offered by the Federal Housing Administration (FHA), this loan enables borrowers to include costs for repairs and improvements directly into their mortgage, making it easier to revitalize older or fixer-upper homes.
The program includes two types: the Standard 203k for larger, structural renovations and the Limited 203k, which is suited for smaller, non-structural repairs.
The FHA 203k loan is particularly popular with buyers who want to create a move-in-ready home tailored to their preferences without needing separate financing for upgrades.
Verify Your FHA 203(k) Loan Eligibility
FHA Limited Rehab Loan Cap Increased from $35,000 to $75,000
As of November 4, 2024, HUD has raised the FHA 203k Limited Rehab loan cap from $35,000 to $75,000—the first increase in nearly 30 years.
This change reflects rising construction and material costs, enabling more extensive renovation projects under the FHA 203k program.
The updated limit supports essential upgrades that may have been previously restricted, such as repairs to major home systems, structural work, and energy efficiency improvements.
This higher cap allows homeowners to finance more comprehensive renovations directly through the FHA 203k Limited Rehab loan, making it a more practical option for today’s market.
Verify Your FHA 203(k) Loan Eligibility
FHA 203k Limited Rehab Period Extended to 9 Months
The extension to a nine-month rehabilitation period for the FHA 203k Limited program is a big improvement because, under the previous six-month limit, homeowners often faced rushed timelines that could lead to project delays, contractor scheduling issues, and even incomplete renovations.
If work wasn’t finished within the six-month period, borrowers risked penalties or even losing funding, which could halt progress and leave homes in unfinished states.
Additionally, supply chain issues, weather, and contractor availability sometimes made the six-month window difficult to meet, leading to increased stress and potential added costs for homeowners.
The new nine-month period offers a more realistic timeline, reducing these risks and making it easier for homeowners to complete renovations thoroughly and without the pressure of an overly restrictive deadline.
Verify Your FHA 203(k) Loan Eligibility
Consultant Fees Now Eligible for Financing in FHA 203k Loans
The updated FHA 203k program now allows consultant fees to be included in the financed mortgage amount, eliminating a previous out-of-pocket expense that could reach $400 to $1,000 or more, depending on the project's scope.
Before this change, borrowers had to pay these fees upfront, which could be a financial strain at the start of the renovation.
By enabling these fees to be financed, the FHA 203k loan eases the initial cost burden, allowing homeowners to work with a consultant throughout the renovation process without needing extra cash on hand.
This update reduces upfront expenses and makes managing renovation budgets more straightforward.
Verify Your FHA 203(k) Loan Eligibility
Initial Draw Amount Increased to Cover Up to 75% of Material Costs
With the latest FHA 203k update, borrowers can now access an initial draw amount that covers up to 75% of material costs, providing significantly more upfront funding.
Previously, the initial draw was more restricted, often limiting the cash flow needed to kick-start larger projects.
Given that material costs for substantial renovations can easily reach $10,000 to $30,000 or more, this change means borrowers could access an initial draw of $7,500 to $22,500, easing the financial strain at the project's outset.
This update allows for smoother progress on renovations, reducing delays due to insufficient starting funds.
Verify Your FHA 203(k) Loan Eligibility
2025 FHA 203(k) Loan Limits in Florida
In 2025, FHA 203k loan limits in Florida vary by county and are set based on the number of units per property.
For a one-unit property, limits range from $528,850 in most counties to $986,253 in high-cost areas like Miami-Dade.
Two-unit properties have limits ranging from $677,120 to $1,262,588, while three-unit properties can go up to $1,526,187.
Four-unit properties have the highest limits, reaching up to $1,896,669 in Miami-Dade County.
These FHA 203k limits align with local housing costs, enabling buyers across Florida to finance both the purchase and renovation of homes with loan amounts suited to each area's real estate market.
Verify Your FHA 203(k) Loan Eligibility
Frequently Asked Questions About FHA 203(k) Loans
After reading all that, If you're considering an FHA 203k loan, here are answers to some of the most frequently asked questions to help you understand this renovation financing option.
What is an FHA 203k Loan?
An FHA 203k loan is a government-backed mortgage program that allows buyers to finance both the purchase and renovation of a home in a single loan.
What Types of Properties are Eligible for FHA 203k Loans?
Single-family homes, multi-unit properties up to four units, and certain types of condos and mixed-use properties qualify, provided they meet FHA guidelines.
How Does the FHA 203k Loan Differ from a Standard FHA Loan?
Unlike a standard FHA loan, the 203k loan includes financing specifically for renovation costs, allowing buyers to roll these expenses into their mortgage.
What Renovations Can Be Funded with an FHA 203k Loan?
Eligible renovations include both structural and non-structural improvements, such as kitchen remodels, roof repairs, and even adding energy-efficient upgrades.
Verify Your FHA 203(k) Loan Eligibility
What is the Difference Between a Standard and Limited FHA 203k Loan?
The Standard 203k is for larger, structural projects and has no cap on renovation costs (within loan limits), while the Limited 203k is for smaller, non-structural repairs with a cap of $75,000.
How Much Down Payment is Required for an FHA 203k Loan?
A minimum down payment of 3.5% is required, based on the combined purchase price and renovation costs.
Are There Any Restrictions on Contractors for FHA 203k Projects?
Yes, contractors must be licensed, insured, and approved by the lender, as they are subject to FHA guidelines to ensure compliance and quality.
How Long Do Borrowers Have to Complete Renovations with an FHA 203k Loan?
Borrowers typically have up to nine months to complete renovations under the Limited 203k program, offering additional time for project completion.
What are the Loan Limits for FHA 203k Loans?
FHA 203k loan limits vary by county and property type, with a range from $528,850 to $986,253 for one-unit homes in Florida, depending on the area.
Can FHA 203k Loans Be Used for Refinancing?
Yes, homeowners can use the FHA 203k loan to refinance an existing mortgage and include funds for renovations, making it a flexible option for home improvements.
Verify Your FHA 203(k) Loan Eligibility
Bottom Line
The FHA 203k loan offers Florida homebuyers a valuable way to finance both the purchase and renovation of a property in a single mortgage.
With recent updates, including an increased rehab limit, extended project timelines, and the ability to finance consultant fees, the FHA 203k loan is now even more practical for those seeking to revitalize homes.
These changes address the challenges of rising costs and project complexity, making it easier for buyers to manage and complete their renovations with less financial strain.
If you’re considering a home purchase with renovation needs, the FHA 203k program provides the flexibility and support to help turn a fixer-upper into your ideal home.
Verify Your FHA 203(k) Loan Eligibility
With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.
About Author - Phil Ganz
Phil Ganz has over 20+ years of experience in the residential financing space. With over a billion dollars of funded loans, Phil helps homebuyers configure the perfect mortgage plan. Whether it's your first home, a complex multiple-property purchase, or anything in between, Phil has the experience to help you achieve your goals.
About Editor - Ryan Skerritt
Ryan Skerritt has over 10+ years of experience in the residential financing space. With over two hundred and fifty million of funded loan volume, Ryan has the skill set to help any homebuyer configure the perfect mortgage plan.
