Welcome to LearnTheK.

Hi, I’m Sulema, and on behalf of the Renovation Connected LLC, welcome to “Learn The K” where we explain the 203k home loan guarantee program’s key benefits and processes so you can be a homeowner!

In this video we provide the basics of the 203k program as an introduction by briefly reviewing the key home buyer benefits and the overall process.

The 203k loan offers four basic benefits: low down payment, a mortgage that includes repair costs, tax deductible interest, and home equity.

If any one of these four benefits describe your desire, then we think that you should continue to watch and listen.

More about the Primary Benefits    

Before we review the basic process, let’s expand on the four primary benefits.

First, the lower down payment is beneficial because the 203k loan only requires three and a half percent down while conventional loans can require as much as twenty percent down. For example, when we talk about money out of your pocket, twenty percent of a hundred-thousand dollar loan is twenty-thousand dollars. But three and a half percent of the same hundred-thousand dollars is only thirty-five hundred dollars.

People seldom find a potential home that is in perfect condition. If changes are inevitable, then using a 203k loan to include repair costs in the mortgage eliminates any need to borrow using high-interest second-mortgages or even-higher-interest credit cards.

Third, for those interested in reducing their taxes through mortgage interest, they should know that by including the repairs in their 203k loan, they may qualify that interest as a deduction on their taxes.

Fourth and finally, we mentioned home equity. If you buy a home for a lower price because repairs are required, and if you are able to keep your repair costs below the comparable neighborhood properties, then when all the work is done you could have a home that is worth more than what you have invested. That is equity.

Now that we’ve explained the four key benefits, let’s look at the process for getting a 203k loan.

The Three-Step Process

The basic process can be summed up as three steps before the sale closes:

  • First, begin building your team of professionals.

    At a minimum, your team of 203k professionals would include a realtor, a loan officer, a HUD Consultant, and a General Contractor. We explain the duties of each in the next video. Use our LearnTheK.com website to build your team of 203k professionals!

  • Second, as you build your team of 203k professionals, look for a place that you could make a home.

  • Third, once you find a place you could call home, use your team to coordinate the necessary inspections and finalize your offer.

For the most part, the 203k home loan process is the same as buying homes using most type of home loans, with this difference, a HUD Consultant must inspect the property to document necessary and desired repairs. HUD Consultants are people authorized by the government to perform these inspections.

The record of repairs are tracked throughout the process to ensure all approved repairs are completed.

After the Sale

After the sale, there are also only three basic steps: Repair, Inspect, and either repeat as necessary or at certain points in the process, the lender issues a check for the approved completed work.


It’s a simple process when you have a plan and you have professionals who are working the plan.

Those are the basics of the 203k program.

Watch the other videos in this series to learn more about the 203k loan program and when you are ready, begin building your team at LearnTheK.com