Can You Refi Into a 203k FHA Loan?

[Lucas Hammer]

So I have a 2-flat that I'm house-hacking and I'm working on renovating it, but the job is bigger than I thought and I'm trying to figure out the best way to pay for a larger remodel than we originally anticipated. We have an FHA mortgage on the property and are currently at 92% LTV based on the purchase price, but prices have noticeably gone up since we purchased the property.

I'm trying to figure out if just selling and hoping to recoup my initial investment or refinancing into a 203k (or taking out a loan to get the work done and refinancing) makes the most sense. So since I already own the place, is it possible to go from FHA to FHA 203k just to get the rest of the work done quickly before I lose it?

[Geordy Rostad]

I did a little Googling on this and learned something new.

Yes! Apparently you CAN use a 203K loan for a refi. They will loan you rehab costs based on the after-rehab value. You should find a local lender or mortgage broker in your area that you can trust and start learning about the procedures and requirements for this sort of loan. If you try to sell it as-is, you will likely be selling at a substantial discount if it's in mid-remodel.