FHA 203k Loan? Good idea or Bad idea?

[Voltaire Almeda]

First time buying, is an FHA 203k loan a good idea (house needs a little work) or should I stick to the conventional FHA loan?

[Charles Baldi]

@Voltaire Almeda It depends on the situation. A 203k loan will be a good percentage more in the interest rate compared to traditional FHA so if there are only a few needed upgrades FHA may be better. You'll have to find out if the property will be able to close using FHA however, as it has to be in generally good condition and there are some live-ability requirements. Or if it won't pass FHA as is but is very close you may consider a higher asking price and seeing if the seller can make the needed repairs. If those two possibilities aren't an option you may need to offer with a 203k. As long as the numbers work it technically doesn't matter which strategy you use. I personally made multiple offers for both FHA and 203k before getting my first deal accepted, which was an FHA loan where sellers were very generous in making various repairs to allow the purchase to close.