FHA 203(k) Renovation Loans in California
First Capital Mortgage Inc. is a California mortgage broker headquartered in Modesto, with a branch in Indio, serving buyers and homeowners across the state, from the Central Valley to the Coachella Valley and everywhere in between. With older housing stock across the Central Valley and plenty of fixer-uppers in the desert, the FHA 203(k) is how many of our clients afford a home in the neighborhood they want.
How a 203(k) Loan Works
An FHA 203(k) loan combines the purchase price (or your current loan balance, on a refinance) and the cost of repairs into one mortgage, based on the home’s value after the work is done. Instead of paying for a new roof, kitchen, or bathroom out of pocket, the renovation money is set aside at closing and paid to the contractor as the work is completed.
Two Versions
- Limited 203(k): non-structural repairs and upgrades up to the FHA cap, with a simpler process and no consultant required
- Standard 203(k): larger and structural projects, with a HUD consultant managing the scope, draws, and inspections
Both use FHA’s 3.5% down payment and credit guidelines. The home must be your primary residence, and the work must start after closing and finish within the program timeline.
The 203(k) Loan Process
- Start Here. Get pre-approved so you know your combined purchase-plus-repair budget before you shop.
- Scope the work. A licensed contractor bids the project; on a Standard 203(k), a HUD consultant writes the work plan.
- Appraise on the after-repair value. The lender approves the loan based on what the finished home is worth.
- Close and renovate. Repair funds are held in escrow and released as each stage passes inspection.
203(k) Questions We Hear Every Week
Can I do the work myself?
Generally no. FHA requires licensed contractors so the lender knows the work will be completed to code.
How long does a 203(k) take to close?
Plan on 45 to 60 days because of the bids and consultant steps. We start the contractor conversation the day you go under contract.
Is there a conventional version?
Yes. Fannie Mae HomeStyle and Freddie Mac CHOICERenovation work similarly with conventional guidelines. We compare all three for your project.
Start Here: 15-Minute 203(k) Application
Not Sure a 203(k) Loan Is the Right Fit?
That is exactly the conversation to have before you apply. Call (209) 522-7100 or send us a note, and we will tell you straight whether it fits or whether a different program serves you better. You can also compare every option on our California loan programs page.