The most common FHA program is the 203(b) FHA Loan. It offers a low down payment, flexible qualifying guidelines limited lender's fees, and a maximum loan amount.

A 203(k) loan enables a home buyer to finance both the purchase and rehabilitation of a home through a single mortgage. A portion of the loan is used to pay off the seller's existing mortgage and the remainder is placed in an escrow account and released as rehabilitation is completed.

Basic guidelines for 203(k) loans are as follows:

• The home must be at least one year old.
• The cost of rehabilitation must be at least $5,000, but the total property value - including the cost of repairs must fall within the FHA maximum mortgage limit.

The 203(k) loan must follow many of the 203(b) eligibility requirements. Lenders will know specifics about improvement, energy efficiency, and structural guidelines.