Sometimes choosing between the two FHA 203k loan options can be confusing and we are often asked “why would someone want an FHA 203k Streamline loan vs. a FHA 203k “regular” loan? And the simple answer that we usually give is: if the cost of repairs is anywhere close to the $35,000 allowed by FHA for the FHA 203k streamline program, go with the streamline.

If it is much, much more than that – you will need to pick the “regular” FHA 203k loan program.

But the answer is really slightly more in-depth than that — and here are just a few other reasons people choose the FHA 203k streamline loan program:

• Architectural exhibits are not required with the FHA 203k streamline
• The lender is responsible for making sure the cost to repair is reasonable
• General contractors and/or consultants are not required
• Some lenders don’t require that you get at least $5,000 in repairs (some do)

If it is clear that you are going to need more than $35,000 to rehab a house, then you will want to go with the “regular” FHA 203k program, but it is much more time intensive and the requirements are more stringent. From what we have seen, in most cases, the $35,000 for repairs is more than enough – which makes choosing the FHA 203k streamline an easy choice.