FHA 203b Loan Information

FHA 203b Loans

There are various type of FHA loans available which can help with different purposes. The FHA 203(b) loan is the official name of the standard FHA loan that is used to purchase or refinance a home.

This should not be confused with the FHA 203k rehab loan which is used to purchase or refinance a home while also borrowing money to rehabilitate the home.

What is an FHA 203(b) Loan?

The FHA 2o3(b) loan is a mortgage offered by lenders that is insured by HUD for the purchase or refinance of a 1-4 family primary residence.

  • The basic 203(b) loan requirements are as follows:
  • The home must be a 1-4 unit property
  • The home must be used as your primary residence
  • The  minimum down payment of 3.5%
  • The minimum credit score is 500
  • You will need a 2 year work history
  • FHA mortgage insurance is required
  • The home must pass the FHA inspection

To learn more about how to qualify, read our official article on the FHA loan requirements.

Who is the FHA 203(b) loan for?

The FHA 203(b) loan is for individuals who may have one or more of the following needs or challenges:

  • You have low credit scores
  • You have a small down payment
  • You have a higher debt to income ratio
  • You have a recent Chapter 13 bankruptcy
  • You have some gaps in your employment history

If any of these scenarios apply to you then an FHA 203(b) loan may be the right mortgage program. Please complete this short form to have a discussion with someone to determine whether you qualify.

FHA 203(b) vs 203(k) Loan

The FHA 203(b) is different than the FHA 203(k) loan in its purpose, but the qualifications are the same. With the FHA 203(k) loan, you will borrow the money needed for the mortgage to purchase or refinance the home, plus additional funds for rehabilitation or updates to the home.

Many lenders do not offer the FHA 203k rehab loan but the ones who do are looking for credit scores higher than 580. The FHA 203k loan also may take a little longer to close vs the FHA 203b.




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