Colorado FHA 203(k)
Renovation Loan

It's an FHA-insured mortgage that combines the purchase price of a home and the cost of renovations into one loan. You close once, and the renovation money goes into escrow and is paid to your contractor in draws as the work is completed and inspected. It's built for older or dated homes along the Front Range that need work before they feel like home.

Limited 203(k): for non-structural work up to $75,000, like kitchens, baths, flooring, roofs, windows, HVAC and paint. A HUD consultant is optional, and the work must be finished within 9 months.

Standard 203(k): for bigger or structural projects, like foundation repairs, additions or major systems, with a minimum of $5,000 in repairs. A HUD-approved consultant is required to write the scope and inspect draws, and the work must be finished within 12 months.

Almost anything that makes the home safer, more livable or more energy efficient: roofing, plumbing, electrical, HVAC, kitchens, bathrooms, flooring, windows, accessibility upgrades and, with the Standard 203(k), structural repairs and additions. Luxury items like a new pool, hot tub or outdoor kitchen aren't eligible.

The same as a regular FHA loan: 3.5% down with a credit score of 580 or higher. The down payment is figured on the total project cost, meaning purchase price plus renovation costs, not just the price. Gift funds can cover it.

The appraiser reviews your contractor's bid and estimates what the home will be worth once the work is done, based on comparable renovated homes nearby. Your maximum loan is based on the lower of the purchase price plus renovation costs, or 110% of that after-improved value, and it must stay within the FHA loan limit for your county.

A 203(k) uses the same limits as any FHA loan. For a single-family home in 2026 that's $541,650 in El Paso and Teller counties and $862,500 in the Denver metro counties. See my FHA loan page for other counties.

There's no official FHA list of approved contractors, but your contractor has to be licensed and insured, and the lender has to accept them. They'll provide a detailed, itemized bid and a timeline. Most lenders don't allow do-it-yourself work, and it's rarely worth the hassle. I can point you to contractors who know the 203(k) draw process.

Often, yes, if it stays safe and livable. If it won't be, the Standard 203(k) lets you finance up to six months of mortgage payments into the loan, so you aren't paying rent and a mortgage at the same time.

Yes. You can refinance your current FHA or non-FHA mortgage into a 203(k) and roll the renovation costs in, as long as the home is your primary residence. It can be a single-family home or a 2–4 unit property you live in.

Any buyer who will live in the home as a primary residence, not just first-time buyers. Since May 2025, FHA loans, including the 203(k), are limited to U.S. citizens and permanent residents.

If you're a veteran with entitlement, start with a VA renovation loan: $0 down and no monthly mortgage insurance. With strong credit and 5% or more down, a conventional renovation loan can avoid FHA's lifetime mortgage insurance. The 203(k) shines when you want a low down payment, have credit in the 580–680 range, or need bigger structural work. I'll compare all three on your file.