Quick 203k Question for Duplex

[Marc Izquierdo]

I recently looked at a duplex that is a HUD foreclosure. My initial plan was to get a 203b FHA loan on the property. The property needs some renovation (new floor coverings, kitchen, bathrooms, etc) but it is completely habitable from day one. However, there is a small section of ceiling and wall drywall that was removed (I think to repair a water leak) and was never re-installed so there are exposed water lines and studs. Right when I saw that, I thought to myself, "well there goes any hopes of FHA financing".

I started poking around looking at the 203k option, specifically the streamline 203k option. Since I don't think the property would qualify for 203b financing, am I able to get a 203k loan and finance whatever work is required to bring the property up to FHA minimum standards (drywall, spackle, sanding, painting and small area requiring less than a sheet of drywall)? I would note that that is all I want to do under the loan, then begin renovating the property with my own cash (I want to do the work myself).

Just wondering if anyone has had any experience using the 203k in a situation where 203b wouldn't work.  Any insight would be great.

Thanks in advance!