Fact or Fiction: 203(k) Rehabilitation Loans

"Luxury" items that aren't a permanent piece of the home won't be approved on your 203(k) application. This includes TVs and furniture.

203(k) loans can be used to finance a one- to four-unit dwelling.

You can put down as much as you want, as long as it's at least 3.5 percent of the home's selling price.

Condos are eligible, but they must be FHA-approved.

The benefit of a 203(k) loan is that you only need to finance once, simplifying the renovation process.

A property does not need to be under foreclosure or in a short sale to qualify for a 203(k) loan.

A 203(k) consultant is not required, but if you need assistance, you can roll the fee into your mortgage.

Any new additions must be attached to the original structure if they are being paid for with the money from a 203(k) loan.

It seems crazy, but under the rules of a 203(k) loan, you are allowed to move an existing dwelling to your mortgaged property and then renovate it.

Although luxury items and renovations are not allowed, a deck is not considered a luxury item and may be built using 203(k) loan money.

Paint and siding are both eligible improvements with a 203(k) loan.

If weather striping is insufficient or non-existent, you must add them as part of the 203(k) energy conservation standards.

You can only refinance a cash purchase within six months of your purchase date.

Loans are handled by your lending bank, and thus interest rates vary.

The streamline 203(k) loan allows you to finance up to $35,000 in repairs for non-structural renovations.

Existing construction must be at least 1 year old in order to be financed with a 203(k) loan.

You can save money and do the work yourself, but a 203(k) loan does not allow you to pay your own labor wages.

You can include some expenses in your 203(k) mortgage while construction is underway, but that includes only six months of mortgage payments, not 12.

If you plan to tear down a home and only reuse the land, you will not be approved for a 203(k) loan.

There are many requirements to meet, but mixed-use properties may qualify for a 203(k) loan.