FHA 203(k) Loans in Florida: Buy a Fixer-Upper With One Mortgage

Short answer

An FHA 203(k) loan rolls the purchase (or refinance) and the repair costs into one FHA mortgage, with as little as 3.5% down on the combined amount for a 580+ credit score. The Limited 203(k) covers up to $75,000 of non-structural work; the Standard 203(k) starts at $5,000 of repairs, has no set repair cap, and requires a HUD-approved 203(k) consultant. In Miami-Dade, Broward and Palm Beach the total loan must still fit under the 2026 FHA limit of $667,000 for one unit.

Standard vs Limited 203(k): the rules as of October 2026

HUD runs two versions. HUD Mortgagee Letter 2024-13 raised the Limited cap from $35,000 to $75,000 for FHA case numbers assigned on or after November 4, 2024, and HUD says it will review that cap every year. It is still $75,000 on HUD's program page as of October 2026.

• Limited 203(k): up to $75,000 in total rehab costs, no minimum. Minor remodeling and non-structural repairs only. Work must finish within 9 months, and you cannot be out of the home for more than 30 days in total. A 203(k) consultant is optional, and since 2024 the consultant's fee can be financed.
• Standard 203(k): at least $5,000 in repairs and no maximum repair amount, as long as the total loan fits the FHA limit. Structural work is allowed. An FHA-approved 203(k) consultant is required. Work must finish within 12 months, and up to 12 months of mortgage payments can be financed while you cannot live in the home.
• Both: FHA rules apply. Primary residence, 1 to 4 units, minimum 3.5% down with a 580+ score (10% with 500 to 579), upfront and annual mortgage insurance (MIP). Extensions are possible with documentation.

Rule of thumb: kitchen, baths, flooring, paint, a new roof or AC and you will not move out for more than a month: Limited. Moving walls, additions, foundation or structural repairs, or a gut job: Standard. Our FHA loans page covers the base program.

What the money can and cannot pay for

HUD's consumer fact sheet lists eligible improvements, including:

• Repairing or replacing plumbing, heating, air conditioning and electrical systems.
• Full kitchen and bathroom remodels.
• Roofing, siding and gutters; new windows and flooring.
• Energy-efficient upgrades and accessibility for people with disabilities.
• Additions, finishing attics, building or renovating a garage, an eligible accessory dwelling unit (ADU), or converting a one-unit home into two to four units (Standard only, since these are structural).
• Structural repairs (Standard only).

Not eligible: luxury items and anything that does not become a permanent part of the property. The Limited 203(k) also cannot be used for work that needs architectural plans or a consultant's work write-up per the appraisal, work expected to take more than 9 months, or more than two payments to any one specialized contractor. Those jobs belong in a Standard 203(k).

Your lender and consultant decide what is permanent and necessary. Get bids from licensed Florida contractors before you finalize the contract price.

How the loan amount is calculated (after-improved value)

The appraiser values the home as if the repairs were already done. That is the after-improved value. HUD's maximum mortgage worksheet for a Standard 203(k) purchase works like this:

• Step 1: add up the financeable costs: construction, permits, architect or engineer fees, consultant and inspection fees, title updates, the contingency reserve (HUD allows up to 20%), any mortgage payment reserve, plus the origination fee and points if financed.
• Step 2: take the lesser of (a) the adjusted as-is value, usually the purchase price, plus Step 1, or (b) 110% of the after-improved value. For a condo, (b) is 100% of the after-improved value.
• Step 3: multiply by the FHA loan-to-value factor: 96.5% with a 580+ score, 90% with 500 to 579.
• Step 4: the result cannot exceed the FHA limit for the county. In Miami-Dade, Broward and Palm Beach that is $667,000 for one unit in 2026.

Example (hypothetical numbers): purchase price $350,000, financeable repairs and fees $60,000, after-improved value $440,000. Option (a) is $410,000; option (b) is $484,000. The lesser is $410,000 × 96.5% = $395,650 base loan. Your down payment is about $14,350. The 1.75% upfront MIP (about $6,924) is usually added on top. Annual MIP is 0.55% a year with less than 5% down on loans of $726,200 or less.

At closing, the repair money goes into an escrow account. It is paid out in draws as work is inspected. HUD's worksheet allows an initial draw at closing for items like permit fees and up to 50% of unpaid materials.

Timeline: from contract to finished work

• Before you apply: get the property under contract with enough time for inspections and bids. 203(k) loans take longer to close than a regular FHA purchase because the contractor bids, consultant report and appraisal all have to line up.
• Standard only: the consultant inspects the home and writes the work write-up and cost estimate. HUD's maximum consultant fee for a write-up is $1,000 for repairs up to $50,000, $1,200 for $50,001 to $85,000, $1,400 for $85,001 to $140,000, and the lower of 1% or $2,000 above that. Draw inspections are capped at $375 each.
• Appraisal: done on the after-improved value, using the contractor bids and write-up.
• Closing: repair funds go into escrow. HUD requires building permits before work starts, posted on site.
• Construction: up to 9 months (Limited) or 12 months (Standard). Contractors are paid by draw after inspection.
• Completion: final inspection, final draw, and any unused contingency goes toward the loan balance or as the lender's rules allow.

Florida specifics: insurance, roofs and Miami-Dade permits

In South Florida, homeowners insurance often decides whether a fixer-upper works.

• 4-point and wind mitigation inspections. Insurers on older homes commonly ask for a 4-point inspection of roof, electrical, plumbing and HVAC. Old wiring, an aging water heater or a worn roof can make a home hard to insure until fixed, and a 203(k) can pay for those repairs. A wind mitigation inspection after new impact windows, shutters or roof straps can lower your premium.
• Roof age. Florida Statute 627.7011 says an insurer may not refuse to write or renew a policy solely because the roof is less than 15 years old. For a roof 15 years or older, the insurer must let you get a roof inspection at your own cost before requiring replacement. Putting a new roof in the 203(k) scope can solve the insurance problem and the repair at once.
• Older Miami-Dade housing stock. Many homes in established neighborhoods have original electrical panels, galvanized or cast-iron plumbing and old roofs. Those are exactly the items a 4-point flags and a 203(k) is built to fix.
• Permits. In unincorporated Miami-Dade, permits come from the County Building Department (Department of Regulatory and Economic Resources). Its home renovation brochure says a new roof, window, door or siding replacement, electrical or plumbing changes (including a water heater) and new A/C work all need a permit. Painting, wallpaper and floor resurfacing do not. Each city in the county has its own building official, so homes in Miami, Hialeah, Doral and other cities use that city's building department. Budget permit fees and time into your scope.

Only licensed contractors or qualifying owner-builders can pull permits in Miami-Dade, and lenders generally require a licensed contractor for 203(k) work.

Condos and other property limits

• Condos: eligible condo units can use a 203(k), but improvements are limited to the interior of the unit. You cannot use it for roofs, facades or common areas, which belong to the association. The building still has to meet FHA condo rules, and the maximum mortgage uses 100% (not 110%) of the after-improved value.
• Milestone inspections and assessments: in older Florida condo towers, the bigger risk is often the building, not the unit. Check for pending special assessments before you budget a unit remodel.
• Co-ops: not eligible, per HUD's program description.
• Mixed-use: allowed if at least 51% of the property is residential.
• Investors: a 203(k) is for homes you will live in. Investors buying to flip use business-purpose loans instead, such as fix-and-flip loans.

How QMS helps with a 203(k)

Not every FHA lender offers 203(k), and the ones that do set their own credit and contractor rules. QMS Lending (NMLS #1781090) is an independent broker in Miami, FL with access to 100+ lenders, so we can match your file to a lender that does Limited or Standard 203(k). We review the scope, the contractor bids and the numbers with you in English or Spanish before you commit. Rates vary daily; call 305-425-1990 for today's pricing. Subject to credit approval.