The general rule for 203(k) eligible repairs
FHA's 203(k) is designed to rehabilitate homes — to make them safe, sound, and more livable — not to build luxury amenities. So when you're deciding whether an item belongs in your scope, ask two questions:
- Is it permanent? Does it become part of the real property — attached, built in, or a system of the house?
- Does it add value or fix a problem? Does it improve function, livability, or value, or correct a health or safety deficiency?
If the answer to both is yes, it's usually eligible. The version of 203(k) matters too: a Limited can't include structural work, while a Standard can. Individual lenders may add their own restrictions, and HUD guidelines change — Matthew will confirm the current rules for your specific scope.
Eligible vs. ineligible improvements
| Generally eligible | Generally not eligible |
|---|---|
| Kitchen remodels: cabinets, counters, sinks, built-in appliances | Swimming pools (new construction) |
| Bathroom remodels and additional bathrooms | Outdoor hot tubs, spas, and saunas |
| Roof replacement and gutters | Tennis courts and sport courts |
| Flooring, interior and exterior paint, drywall | Outdoor fireplaces, fire pits, and barbecue pits |
| HVAC, plumbing, and electrical systems | Gazebos and similar outdoor luxury structures |
| Windows, doors, siding, and insulation | Furniture, and anything not permanently attached |
| Decks, patios, and porches (functional) | Commercial-use improvements |
| Well, septic, and sewer connection | Work on a property you won't occupy |
| Garages (repair or new, on a Standard) | Items the appraiser won't credit and that don't fix a deficiency |
Repairs to an existing pool may be allowed in some cases when they address safety, but building a new one is not. When in doubt, list the item and ask before it goes into a bid.
Have a specific house or project in mind? Matthew can tell you whether a 203(k) fits — and what to do next.
Talk with MatthewStructural and major systems work
These items are where a 203(k) really earns its keep, because they're hard to finance any other way.
Structural (Standard only)
Foundation repair and leveling, replacing framing or floor joists, removing or relocating load-bearing walls, room additions, second stories, and garage conversions. These require the Standard's HUD consultant and a detailed work write-up.
Major systems
Full or partial rewiring, panel upgrades, re-piping, new sewer lines, water heaters, and HVAC replacement. Most systems work is non-structural and can fit a Limited if the budget allows.
Roof and envelope
Re-roofing, flashing, gutters, siding, and exterior repairs that keep water out. Replacing roof structure — rafters and decking on a large scale — is structural.
Water, well, and septic
Repairing or replacing a well or septic system, or connecting to public water and sewer when available.
Accessibility and energy-efficiency improvements
Accessibility modifications are a strong fit for a 203(k), because they're permanent and directly improve livability. Examples include:
- Ramps and zero-step entries
- Widened doorways and hallways
- Roll-in or curbless showers and grab bars
- Lowered counters and accessible kitchen layouts
- Moving a bedroom or full bath to the main floor (often structural)
Energy efficiency improvements are also generally eligible: replacement windows and doors, added insulation, air sealing, high-efficiency HVAC and water heaters, and in many cases solar or other renewable systems when they're permanently attached and meet program guidelines. FHA also has a separate Energy Efficient Mortgage option that may be combined in some situations — ask Matthew whether it applies to your file.
Health and safety repairs
Health and safety items are the heart of the program. Many homes can't pass a standard FHA appraisal because of these issues — a 203(k) lets you fix them as part of the purchase.
- Lead-based paint: homes built before 1978 with deteriorated paint typically need stabilization or abatement by certified professionals.
- Mold and moisture: fixing the source (leaks, drainage) and remediation.
- Radon and asbestos: mitigation or removal where required.
- Safety hazards: handrails, broken stairs, missing smoke detectors, exposed wiring, and trip hazards.
- Pest damage: termite treatment and repair of damaged wood (structural damage points to a Standard).
Appliances, landscaping, and other gray areas
Appliances: built-in appliances as part of a kitchen remodel — a range, dishwasher, built-in microwave, or range hood — are generally eligible. Free-standing appliances like refrigerators, washers, and dryers are a gray area; some lenders allow them as part of a kitchen or laundry project and some don't. Treat them as lender-dependent and confirm before they're in the bid.
Landscaping: landscaping that protects the property or fixes a problem — grading to move water away from the foundation, erosion control, removing dead trees near the home — is generally eligible. Purely decorative landscaping, such as elaborate plantings or water features, usually isn't, and lenders often limit how much of the budget can go to site work.
Fences, driveways, and walkways: generally eligible when they're functional, especially when they fix a safety issue or deteriorated condition.
Your own labor: sweat equity is tightly limited. See contractor requirements for how that works.
Planning your 203(k) scope
A few habits make approvals smoother and appraisals stronger:
- Put required repairs (health, safety, and anything the appraiser flags) at the top of the list.
- Prioritize improvements the local market pays for — kitchens, baths, and systems usually appraise better than niche upgrades.
- Ask the contractor for a line-item bid, not a lump sum. Underwriters need to see what's being paid for.
- Keep a wish list of “phase two” items you can do later with cash if the budget or loan limit gets tight.
If you're considering luxury items that the 203(k) won't cover, a conventional renovation loan may be a better match — see 203(k) vs. HomeStyle.
Sample 203(k) scopes: what makes the cut
Here's how the eligibility rules play out on three typical wish lists:
| Wish list item | Likely treatment | Why |
|---|---|---|
| Quartz counters and new cabinets | Eligible | Permanent kitchen improvement that adds value |
| Replace cracked driveway | Generally eligible | Functional repair; trip hazard |
| New in-ground pool | Not eligible | Luxury item |
| Grab bars and a curbless shower | Eligible | Accessibility improvement |
| Outdoor kitchen with built-in grill | Not eligible | Treated like an outdoor barbecue pit |
| French drain along the foundation | Eligible | Protects the structure from water |
| Stainless refrigerator | Lender-dependent | Free-standing appliance |
| Knocking out a load-bearing wall | Eligible on a Standard only | Structural work |
Before the contractor finalizes a bid, send Matthew the list. A five-minute review can keep an ineligible item from holding up underwriting later.
Frequently asked questions
Can a 203(k) loan pay for a swimming pool?
No. New pools are considered a luxury item and aren't eligible. Limited repairs to an existing pool may be allowed in some cases for safety reasons.
Can I buy new appliances with a 203(k)?
Built-in appliances as part of a kitchen remodel are generally eligible. Free-standing appliances depend on the lender, so confirm with Matthew before including them.
Can I add a room or garage with a 203(k)?
Yes, with a Standard 203(k). Additions are structural work, so they require a HUD consultant and can't be done on a Limited.
Is solar eligible under a 203(k)?
Permanently attached energy improvements, including solar in many cases, may be eligible. Rules depend on the setup and lender, so ask before adding it to your scope.
Does a 203(k) cover lead paint removal?
Yes. Lead-based paint stabilization or abatement is a common health and safety item on older homes.
Ask Matthew about your 203(k) project
Tell Matthew a little about the property and your plans. He'll follow up by phone or email — no obligation.
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