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8 Best FHA 203(k) Mortgage Lenders of 2020
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Buying a fixer-upper or remodeling your current home? NerdWallet has selected some top FHA 203(k) lenders to make your loan search easier.
Home buyers can use an FHA 203(k) loan to purchase and renovate a house with the same mortgage. Homeowners can use an FHA 203(k) refinance loan to roll the cost of home improvements into their monthly mortgage payment.
To take advantage of this versatile mortgage product, you’ll need an FHA 203(k) lender. NerdWallet has identified some of the top FHA 203(k) lenders across several categories to help you get started.
Home buyers can use an FHA 203(k) loan to purchase and renovate a house with the same mortgage. Homeowners can use an FHA 203(k) refinance loan to roll the cost of home improvements into their monthly mortgage payment.
To take advantage of this versatile mortgage product, you’ll need an FHA 203(k) lender. NerdWallet has identified some of the top FHA 203(k) lenders across several categories to help you get started.
Summary of Best FHA 203(k) Mortgage Lenders of 2020
| Lender | NerdWallet Rating | Minimum Credit Score | Minimum Down Payment | National / Regional | Learn More |
|---|---|---|---|---|---|
Best for first-time home buyers | 700 | 3% | National | at New American | |
Best for digital convenience | 620 | 3% | National | at Fairway | |
Best for best for low down payment options | 620 | 3% | N/A | at Northpointe | |
Best for 203(k) refinancing | 620 | 3.5% | National | at LoanDepot | |
Best for first-time home buyers | 620 | 3% | N/A | Read review | |
Best for borrowers with a low credit score | 620 | 3% | National | Read review | |
Best for borrowers with a low credit score | 620 | 3% | National | Read review | |
Best for 203(k) refinancing | 620 | 3% | National | Read review |
at New American
New American Funding: NMLS#6606
Min. Credit Score
Min. Down Payment
National / Regional
at New American
at Fairway
Fairway Independent Mortgage: NMLS#2289
Min. Credit Score
Min. Down Payment
at Fairway
at Northpointe
Northpointe: NMLS#447490
Min. Credit Score
Min. Down Payment
at Northpointe
at LoanDepot
loanDepot: NMLS#174457
Min. Credit Score
National / Regional
at LoanDepot
Wintrust Mortgage: NMLS#449042
Min. Credit Score
Min. Down Payment
Caliber: NMLS#15622
Min. Credit Score
Min. Down Payment
HomeBridge: NMLS#6521
Min. Credit Score
Min. Down Payment
PrimeLending: NMLS#13649
Min. Credit Score
Min. Down Payment
Last updated on July 10, 2020
Methodology
NerdWallet's selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.To recap our selections...
NerdWallet's Best FHA 203(k) Mortgage Lenders of 2020
- New American Funding: Best for first-time home buyers
- Fairway Independent Mortgage: Best for digital convenience
- Northpointe: Best for best for low down payment options
- loanDepot: Best for 203(k) refinancing
- Wintrust Mortgage: Best for first-time home buyers
- Caliber: Best for borrowers with a low credit score
- HomeBridge: Best for borrowers with a low credit score
- PrimeLending: Best for 203(k) refinancing
Frequently asked questions
In addition to the lenders we've highlighted above, you can also use the Department of Housing and Urban Development's FHA lender search page to find FHA 203(k) loan lenders. It's a helpful tool, because while FHA 203(k) rehab loans are widely available, not every FHA-approved lender offers the 203(k).
To use the HUD search tool, enter your search parameters — your state is probably the most important, since lenders are licensed by individual states — and click the "Rehabilitation" box at the bottom of the list, where it says "203(k) Rehabilitation Mortgage Insurance Program." If you're trying to get the scoop on a specific lender, you can just enter the company name at the top of the form, then click the "Rehabilitation" box at the bottom.
» MORE: Tips on choosing an FHA lender
Yes. FHA 203(k) loans have the same down payment requirements as standard FHA loans. If your credit score is 580 or above, the FHA allows a down payment that's as low as 3.5%. For credit scores between 500 and 579, the required FHA down payment is 10%.
It's important to note that while the FHA has low credit score requirements, individual lenders may choose to set higher minimums. If your credit score falls below 620 or so, you may need to do more hunting to find a lender that will approve your 203(k).
Keep in mind that all FHA loans, including the 203(k), allow you to use gift money or other forms of down payment assistance to help come up with that 10%.
To qualify for an FHA 203(k) loan, you'll have to meet the same FHA requirements you would for a standard loan. These include the credit score and down payment minimums mentioned above, as well as having a debt-to-income ratio of at least 50%.
The property you're buying or refinancing must be your primary residence. Though the home does not have to be up to the FHA's housing standards — after all, you're fixing it up — it's expected that after your repairs and upgrades, the property will pass an FHA appraisal.
