Top 203 (k) Rehab Mortgage Lenders in 2021


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


To determine the best FHA 203 (k) rehab mortgage lenders, Bankrate evaluated lenders based on several criteria, including affordability (APR and fees); scope of loan offers; and online capabilities.

Best Rehab Mortgage Lenders FHA 203 (k)

Loan deposit

LoanDepot offers some of the most competitive rates and a streamlined process, closing loans up to 50% faster than its competitors. Part of this is because the lender uses asset verification technology instead of requiring borrowers to send documents by mail or fax.

Although LoanDepot offers online services, the lender also has 200 branches if you prefer to see a loan officer in person. For an FHA loan, he accepts a credit score as low as 580.

New American funding

New American Funding offers a variety of mortgage products in 49 states (Hawaii being the exception) 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 a borrower’s financial situation holistically instead of relying on automated underwriting. For this reason, if you have a lower credit score or unique circumstances, you might 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.

Caliber home loans

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

For FHA loans, the lender follows the guidelines of the FHA. To improve your chances of getting approved for a loan, you may be able to submit additional documents, such as your rental history, to prove your creditworthiness. In general, you are more likely to be approved if you have average to excellent credit.

What is an FHA 203 (k) rehab loan?

The FHA 203 (k) loan is a type of mortgage guaranteed by the Federal Housing Administration for buyers who wish to renovate the home they are buying. 203 (k) loans tend to have more competitive rates and require a lower down payment and credit rating than other types of loans. Like other FHA mortgages, 203 (k) loans require you to pay a mortgage insurance premium with your monthly loan payment.

How does a 203 (k) loan work?

A 203 (k) loan consolidates your mortgage and home improvement funds into one loan. After you close the loan, a portion of the loan proceeds are paid to the seller of the home and the balance is used for renovations.

To be eligible for a 203 (k) loan, the home must be at least one year old and the renovation costs must be at least $ 5,000. Additionally, the amount borrowed cannot exceed the region’s FHA loan limit, the home’s post-renovation value, or its pre-renovation value, whichever is lower.

You also cannot use a 203 (k) loan for just any project. You will need to comply with the requirements for qualifying renovations, which include replacing the roof and floors, improving the home for accessibility reasons, or improving energy efficiency.

Who is eligible for a 203 (k) loan?

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

  • A minimum credit score of 580
  • A debt-to-income ratio (DTI) of 50% or less (individual lenders may have higher or lower requirements)
  • The house is your primary residence and passes inspection once renovations are complete

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