203k Loan Limits Question

[Michael Sellers]

I know FHA/203k loans have limits based on your geographic county as well as the number of units involved, but do those loan limits for a multi-family property depend on the number of units being bought or the number of units being built? For example, if I were to purchase a small single-family with plans to use renovation money to construct three units (assuming I had zoning approval), would the lender loan on one unit or three? The difference in my county is worth an additional $420k. If you can add a 4th unit, the difference goes up to over $700k in additional funds.

Logically, the answer seems to be that the lender would only lend on what is being purchased, but the counter to that is that since it is a government loan, there is already a painful amount of approval/red tape involved, so the lender would have seen my architectural plans and would be conducting inspections for each loan draw that would confirm that I am spending the money how I say I am.