Financing via a FHA 203k Loan - Any loopholes?

[Kayla Birkhead]

Hi!

My husband and I are learning about opportunities to build a REI business in order to reach financial independence, live on passive income, and build generational wealth. My husband, has work experience in construction and we recently renovated (live-in-flip) our first home in the Hendersonville, NC area which we purchased in the fall of 2020. I am a travel sonographer and we are currently living in the Boston, MA area for my work, while renting out our Hendersonville, NC property on Airbnb.

We are looking to purchase a second property and exploring financing options. In regard to an FHA 203k loan, I understand that one of the qualifications states that, "Repairs and renovations must be performed by a contractor and not by the borrowers themselves." One option we were exploring was to purchase a live-in-flip home (as we did with our first property) and use an FHA 203k loan to build the cost of repairs/renovations/improvements as well as LABOR into the cost of the loan.

My question is- can our REI business use financing via a FHA 203k loan to purchase the property and then pay my husband for labor in renovations as that is his background previously working in construction prior to our journey with travel healthcare? Or is there a loop-hole for this qualification if we will be doing a live in flip? This would be for the purchase of a multi-family property in need of rehab and we would use one of the units as out permanent residence/current tax home for living when we are between assignments with my work.

Thanks in advance!

Kayla