No. That is one of the biggest myths about 203k loans. These loans work on a wide range of homes, from houses that only need light updates to houses that need a full gut renovation.
A Limited 203k is a great fit when the house is already livable but dated. Think new flooring, fresh paint, kitchen cabinet updates, bathroom refreshes, windows, and other cosmetic improvements. You do not need a falling apart house to use this option.
A Standard 203k is built for bigger projects. That can include a new roof, electrical and plumbing updates, moving walls, adding bedrooms or bathrooms, and major repairs. This is the version families use when the house needs more than a refresh.
The common thread is not how bad the house looks. The common thread is that you want to buy or refinance a home and finance the improvements in one loan. A house in decent shape can still be a smart 203k project if the updates will make it fit your family better.
So if you have been skipping over dated but solid homes because you thought these loans were only for distressed properties, look again. Renovation loans can work on light updates, mid level remodels, and full gut jobs.
Talk with an experienced 203k lender about the house you are considering. They can help you choose the right version based on the amount of work, not just how rough the house looks today.
