Winter is just around the corner, and more than a few roofs across the country will surely be diagnosed by a professional roofing expert as “DOA, time to get a new one!”

If you have recently received the news of “you need a new roof” from your local roofing expert, perhaps it will help you feel better to know that FHA has a loan program that is designed to help finance things such as a roof replacement and makes it as easy as possible to get qualified and get the repairs done.

The loan program is called the FHA 203k streamline program and it is designed to allow homeowners to finance improvements for up to $35,000 into the mortgage. For those homes that need major rehabilitation, there is also a full FHA 203k loan which will allow more than $35,000 worth of rehabilitation work to be done.

Because the 203k streamline is an FHA program, all standard FHA guidelines apply when qualifying for the loan and you can choose an FHA fixed or variable interest rate when qualifying.

More Than New Roofs Are Eligible

Depending on the size of your roof, a new roof could easily cost more than $15,000 and for many families the easiest and most cost effective way to finance the cost of the new roof is to use the FHA 203k streamline program.

Many times when replacing a roof, there are other items that homeowners replace as well – heating/air conditioning systems, storm windows and doors, insulation upgrades and weather stripping.  All of these items are also eligible for financing under the 203k streamline guidelines.

A short list of the most popular eligible improvements under the 203k streamline guidelines include:

  • Repair/replacement of roofs, gutters and downspouts
  • Repair/replacement of HVAC systems
  • Upgrade of plumbing and electrical systems
  • Flooring
  • Exterior decks, patios or porches
  • Storm windows/doors
  • Purchase and installation of new appliances
  • Disability access improvements

These things are not everything that is eligible under the 203k program, just the most popular improvements that people use the program for.

Using Licensed/Bonded/Insured Contractors

Under the 203k streamline guidelines, you must use contractors to complete the work unless you can provide documented proof that you can perform the work yourself (for example, if you are a licensed plumber or electrician) and the lender will verify that contractors credentials in the loan process.  The contractor will also have to provide licensing, bonding and insurance documents and professional estimates.

Also, for the 203k streamline program a general contractor is not required, you can line up the sub-contractors who will complete the work yourself.

Payments To Contractors

Once the loan is approved and closed, the repair funds are held in escrow until payment is made to the contractor.  You will have up to 3 months from your closing date to complete the work and no more than 2 payments (first payment and final payment) may be paid to the specific contractors.  The first payment is limited to a maximum of 50% of the total cost and all payments are disbursed to the contractor unless the borrower is performing the work as approved earlier.

Why The 203k Streamline Program Is Popular

As a result of the credit crunch of 2008, many lenders have tightened their guidelines for Home Equity Lines of Credit (or even eliminated them altogether) and the 203k streamline program has become a more popular option for those people needing (or wanting) to make significant investments to improve their property.

Like those people who need a new roof!

  • Laurel

    It is unclear from this article whether this existing homeowners can use this on their own home for improvements or is the program only for new home buyers?

  • Justin McHood


    Thanks for the comment and sorry I wasn’t more clear. The 203k program is for both existing and new home buyers.

    So for example, if you currently live in a property and need a new roof, you can refinance with the 203k streamline program.

    Or, if you are thinking of buying a new house that needs a new roof, you can also purchase it with the 203k streamline program.


  • Heath

    Now here is my question.

    I operate a foundation repair company…is waterproofing or foundation repair included in this…and also on a side note i am on the hunt for viable home improvement loan companies, i currently have options but i am on the hunt for more…we are located in michigan, so any feedback on this would help…

  • Justin McHood


    Thanks for the comment!

    The answer to your question of “is waterproofing or foundation repair included in this” is two-fold (I think!).

    First, foundation repairs are generally considered to be structural and not considered eligible improvements under the streamline section of the 203k loan program.


    They are considered eligible improvements under the 203k standard (not 203k streamline) program.

    Second, basement waterproofing is considered to be “non structural” and is an eligible improvement under the 203k streamline program.

    Which highlights another point — there are differences between the FHA 203k streamline program and the FHA 203k program.

    A few of the main differences between a FHA 203k streamline loan and a FHA 203k regular loan:

    * Only a handful of lenders are taking in loans under the full FHA 203k guidelines, but many FHA lenders are offering the streamline version.

    * Under the 203k streamline, no consultant and architectural plan is required.

    * The 203k streamline loan does not require a general contractor.

    * An FHA 203k loan does not have a maximum limit on improvements as long as you stay within the FHA loan limits. The FHA 203k streamline program allows a maximum of $35,000 for improvements.

    There are other differences between the FHA 203k streamline and FHA 203k standard programs, but these seem to be the most common ones that people ask about.

    The answer to your question of “and also on a side note, I am on the hunt for a viable home improvement loan company…” is:

    Sounds good, I will be on a plane and see you tomorrow.

    Just kidding.

    I have written a few things on how to find a good (hopefully great) loan officer both here on Zillow as well as a local Phoenix Real Estate blog that I contribute to and in a nutshell, here is what my best advice is:

    1. Ask for a referral from a Realtor that you personally know and like.

    2. Ask the first loan officer that you speak with to refer you to the best 2 loan officers they know.

    3. Ask the loan officer if you can speak with one of his clients currently using his services.

    4. Use the Internet to learn more about your loan officer.

    Here are the posts on how to find a good (hopefully great) loan officer:

    Lastly, sorry for the long answer — you can always contact me directly if I didn’t answer it directly or my answer prompted more questions!


  • JoeBob

    FHA already allows for cash out refinance up to 95% of appraised value. Why go through the hassle and not just do a cash out and hire the contractors on your own?

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  • Doug Redman

    203k -contractor has clients


    I am a contractor in Houston,Tx. I have NUMEROUS clients who have a 5% insurance deductibles and can not afford to make repairs from Hurricane Ike. I heard about the 203k from a friend and want to find a lender to work with.

    also, what do I need to do to become an approved contractor.

    thank you,

    please call me. 512-269-6602

  • Marlyce Benjamin

    Where can I find the most current eligibility criteria for this loan?

  • Justin McHood


    A great starting point to find the most current eligibility criteria for this loan and answers to any questions related to the 203(k) program is on HUD’s website.


  • Pingback: Arizona FHA Loans - As Popular As Ever : Arizona Mortgage Team >> Arizona FHA Streamline and Reverse Mortgage Experts.

  • Diana

    I’m approved the 203K streamline loan, my question is why do I have to wait 60 days until I can close on my house?

  • Victoria S- IL

    I live in Illinois and am considering the 203k streamline loan. I do have a couple of questions though.
    #1) I am seeing a lot of comments as to whether or not to use a consultant. Is it really okay to skip the consultant & if so is it harder to get the budget approved? Do we take the budget directly to the lender or appraiser if no consultant is used? This is my first home purchase and I’m unsure of the sequence of these events.
    #2) I have friends/family in construction who are very capable of making repairs/writing up bids for the work required, which will obviously save me on labor. Am I going to have a problem getting bid approved since it will be lower than typical bid due to discounted labor costs? I’ve seen that this may be the case as they may be suspicious of lower bid. I don’t want to pay someone I don’t know more money for the same work….Any advice would be appreciated

  • James

    Victoria S,

    I live in Illinois as well, and am considering the 203k program. I think I have a similar situation as yours. I have friends and family in construction that are going to help me. Can you please tell me if you found out any information on this program, and a lender who deals with this program.

    James – Illinois

  • Justin McHood

    Thanks for asking a question – I am not aware of this rule – you may want to check/double check what your loan officer is telling you.

    Thanks for stopping by and commenting.
    You are in luck! One of the best loan officers in America also happens to work in IL and will be happy to help you. Here is his contact information:

    Dan Green | Loan Officer
    p: 877-DAN-GREEN (877-326-4733)

    Read my award-winning mortgage blog


    I have been looking at the 203K Streamline and the Title I home improvment loan. How can I determine which would be a better fit for me and which is easier to accomplish. I have good credit. Also, I have a Mortgage company calling me to do a streamline to reduce my interest rate saving me $105.00 per month. Can a 203k streamline and an interest rate reduction streamline be done together. The 203K is for a new roof.

  • AMW

    I was just introduced to the concept of a “double close” loan as an alternative to a 203k streamline. It requires all repairs to be done within three weeks after the closing, and there is a second “closing” at the point that the repairs are, I assume, inspected and approved, and the remainder of the loan is released. Could you please give more detail on this type of loan?

  • Michele

    Can you please recommend an eastern Pennsylvania loan officer with 203k Streamline experience?

  • George Ward


    Was just hoping you would consider working with us for any of your 203k’s.

    Thank you,

  • Ken

    My mother just brought a new home which needs a new roof that will cost about $18,990 we did do a check and most came close to this amount including Sears, so we decided to go with Sears, however through their credit dept she was not approved for the card, so then I took my friend who has been working and with good credit and still was not approved, how do I get this FHA loan, I do believe that the was eligible for an Fha loan, My last question is how long dose this process take to get the loan for her roof.

    Thank you
    Please email me.

  • james

    is the FHA 203k streamline program only availible to people financed by hud or can others apply

  • RW Spurlock

    A lot of good information here. We are a state of Florida certified general contractor since the year 1973 as such we enjoy reciprocity with most building departments other than those of California and Hawaii. In addition we are an FHA registered inspector.

  • Orlando Roof Roofer new roof Repair

    Wow a great knowledgeable post …:-)

  • Pingback: Roof financing | Mortgageloanss

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