The walls have layers of paint, carpet was dirty, and since the house is a little older the floor has settled and warped a bit.

Or just putting basic updates in replacing carpet and going with the three lower-end homes next to it.

In the 12 months, we fixed the landscaping, ripped out the subfloor, replaced it and carpeted, ripped out the hot tub and sauna. 

(bedroom carpets are in good condition)2. 

The foundation seems to be in an okay state from the report, but all the drywall, carpet, and ceilings have visible mold.

(For example say a 4 bd/2 ba turned into a duplex each having 2 bd/1 ba)I am also wondering how distressed a property must be to qualify for a 203k... does the home have to first be considered to NOT be in livable condition, or can this loan be applied to a paint and carpet rehab?

Here is what sticks out to meproperty taxes seem very low, try and verify on assessors website.always assume there are some repairs, even if its just cleaning carpet and mending a few drywall errors.i try and add in at least 1k-ishverify interest ratesmy local area is climbing to almost 4.5 and 5%closing costs as wellunless you have records of utility's guess higher then you would normallyHope this helps i cant really say more without knowing more.

Remodel tthe bathrooms, upgraded kitchen, added new walls and carpet What was the outcome?

After a thorough cleaning, I replaced all carpets; painted several rooms with modern colors & touched up the others; upgraded a few fixtures; and, made several small but impactful cosmetic improvements.What was the outcome?

It just needed touch up paint and carpet cleaning.