Looking at a fixer-upper in Lexington or the surrounding areas? An FHA 203(k) rehab loan allows you to finance the home purchase and approved renovation costs in one mortgage. It’s an efficient way to buy an as-is property and turn it into the home you want—without relying on multiple loans or paying out-of-pocket for repairs.

Why 203(k) Rehab Loans Are a Smart Choice in Lexington, KY

Lexington, Hamburg, Masterson Station, Chevy Chase, and many of the city’s established neighborhoods offer homes with potential—but may need updates. A 203(k) loan helps buyers and homeowners renovate affordably while keeping the financing simple. Here’s why the program fits Lexington so well:

• Unlock more home options: Buy homes that need updates and wouldn’t qualify for traditional financing.
• Finance improvements affordably: Roll the renovation costs into your mortgage with one predictable payment.
• One closing, one loan: Avoid juggling personal loans, credit lines, or separate construction financing.
• Build equity faster: Strategic upgrades can add value quickly in Lexington’s competitive housing market.

What an FHA 203(k) Loan Includes

An FHA 203(k) loan, backed by the Federal Housing Administration, allows you to finance both the purchase or refinance of a home and approved renovations. It’s ideal for properties that need anything from modest repairs to major improvements.

Two versions exist:

• Standard 203(k): For structural repairs, large renovations, additions, system upgrades, or major remodeling.
• Limited 203(k): For smaller, non-structural updates such as paint, flooring, windows, fixtures, and cosmetic improvements.

Renovation funds are held in escrow and released as the work is completed. Once the improvements are finished, you enjoy a fully updated home financed under one mortgage.

Who Should Consider a 203(k) Loan in Lexington, KY

• Buyers seeking older or undervalued homes in Lexington’s established neighborhoods.
• Homeowners wanting to refinance and complete needed repairs or upgrades.
• First-time buyers who prefer affordable entry points into homeownership without sacrificing renovation quality.
• Anyone planning to modernize or expand a home before moving in.
• Buyers looking to build equity through smart, value-added improvements.

How a 203(k) Loan Works with Honor Home Loans in Lexington

1. Find a home needing updates or repairs. You can also refinance a home you already own.
2. Consult with our Lexington mortgage team. We help you understand the program and choose the right 203(k) option.
3. Gather contractor bids and finalize your renovation plan. Standard 203(k) loans require a HUD-approved consultant.
4. Underwriting evaluates the after-improvement value. This can expand your borrowing power beyond the home’s current condition.
5. Close and begin renovations. Repair funds are held in escrow and released as work progresses.
6. Move into your upgraded home. Enjoy a renovated property with one mortgage and one consistent monthly payment.

What You Can Renovate with a 203(k) Loan

• Kitchen upgrades, new cabinets, countertops, and layouts
• Bathroom remodels and fixture upgrades
• Roof replacement, HVAC, electrical, and plumbing improvements
• New flooring, paint, and interior modernization
• Energy-efficient windows, exterior updates, and insulation improvements
• Structural repairs, additions, or wall reconfigurations
• Restoring older homes in classic Lexington neighborhoods

Disclaimer: The content on this page is based on regulations and information available at the time of posting, but may change without our knowledge. This content is intended for informational purposes only and does not constitute any legal or binding agreement.