What Can You Finance With a 203(k)?
Eligible and ineligible improvements under the FHA 203(k) — Limited and Standard. Including the nuances that generic guides miss.
The general rule
The FHA 203(k) is designed to finance improvements that are permanently affixed to the property and add value. Luxury items and work that is primarily cosmetic without adding value are generally excluded.
The distinction between Limited and Standard matters significantly here — structural work is only available under the Standard. See the full comparison →
Eligible improvements (both Limited and Standard)
- ✓Kitchen and bathroom remodels
- ✓Flooring (carpet, hardwood, tile)
- ✓Roofing, gutters, downspouts
- ✓HVAC systems (heating, cooling, ventilation)
- ✓Plumbing upgrades
- ✓Electrical upgrades
- ✓Window and door replacement
- ✓Weatherization and energy efficiency improvements
- ✓Painting (interior and exterior)
- ✓Appliances (built-in only)
- ✓Accessibility improvements
- ✓Septic system and well repair/replacement
Standard-only improvements
- ✓Structural repairs and alterations
- ✓Room additions
- ✓Garage additions
- ✓ADUs (accessory dwelling units) — case-by-case
- ✓Foundation repair
- ✓Structural wall removal
- ✓Major rehabilitation of uninhabitable properties
Ineligible improvements
- ✗New swimming pool construction (note: repair or removal of an existing in-ground pool may be eligible subject to FHA requirements)
- ✗Hot tubs, outdoor spas
- ✗Tennis courts, gazebos, barbecue pits
- ✗Luxury landscaping
- ✗Work that is primarily cosmetic and doesn't add value
- ✗New construction (separate from rehabilitation)
- ✗Improvements to detached structures (with limited exceptions)
Agency rules vs. lender overlays
HUD's guidelines define what is and isn't eligible. But individual lenders often impose additional restrictions — overlays — that go beyond HUD's requirements. A lender might decline to finance a specific type of improvement that HUD's guidelines technically permit.
This is why "can I finance X with a 203(k)?" doesn't always have a single answer. The answer depends on HUD's guidelines, the specific lender's overlays, and sometimes the specific underwriter reviewing the file.
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