The standard FHA purchase loan is the 203(b). HUD's special programs build on it: 203(k) adds renovation costs to the loan, 203(h) helps eligible disaster victims buy or rebuild — with no down payment required — an Energy Efficient Mortgage can finance cost-effective energy upgrades, and Good Neighbor Next Door offers eligible teachers and first responders discounts on certain HUD-owned homes. Each has its own rules, and availability varies by lender.
FHA 203(b): the standard FHA loan
When people say “FHA loan,” they almost always mean a Section 203(b) mortgage — named for the section of the National Housing Act that authorizes it. It finances the purchase or refinance of a 1–4 unit home you'll live in, with FHA insuring the lender against loss.
- 3.5% minimum down payment with a 580+ credit score; 10% generally with scores from 500 to 579.
- Down payment can come from savings, acceptable gifts, or eligible assistance programs.
- Upfront and annual mortgage insurance premiums apply — see FHA mortgage insurance.
- County loan limits apply — see FHA loan limits.
- The home must meet FHA's Minimum Property Standards.
Every program below either modifies the 203(b) (adding repair costs or energy upgrades) or targets a specific group of buyers. If none of them fits, the 203(b) is still one of the most flexible low-down-payment loans available. The full checklist is on FHA loan requirements.
Which FHA program should I read about?
Answer a few questions to see which program page to read next. It's a pointer, not a loan decision.
Does the home you want need repairs or updates you'd like to finance?
Did you lose your home, or was it heavily damaged, in a federally declared disaster?
Are you interested in energy upgrades like insulation, windows, or a new HVAC system?
Are you a full-time teacher, law enforcement officer, firefighter, or EMT?
Will the home be your primary residence?
Your answers stay in your browser — nothing is saved or sent. This is a quick orientation, not a loan decision.
FHA 203(k): buy or refinance, plus repairs
The FHA 203(k) loan combines the purchase price (or refinance payoff) and the cost of eligible repairs into one FHA-insured mortgage. It's built for homes that wouldn't pass FHA's property standards as-is, or for buyers who want to update a home right away.
Limited 203(k)
For non-structural repairs and improvements — think roof, flooring, kitchen updates, paint, HVAC. HUD raised the cap on eligible repair costs in 2024; a 203(k) consultant isn't required.
Standard 203(k)
For larger projects, including structural work. A HUD-approved 203(k) consultant prepares the work write-up, and funds are released in draws as work is inspected.
Both require owner-occupancy and follow FHA credit and loan limit rules. Luxury items such as pools aren't eligible. The deep dive — how draws work, contractor rules, timelines, and consultants — is on Matthew's dedicated site, FHA 203(k) Info. Texas buyers can also see Texas Renovation Loans.
Want a straight answer for your situation? Skip the call center — Matthew will review your credit, budget, and FHA options himself.
Talk with MatthewFHA 203(h): for disaster victims
The Section 203(h) program helps people whose homes were destroyed or badly damaged in a Presidentially declared major disaster buy or rebuild a home. Its standout feature: eligible borrowers can generally finance the home with no down payment — 100% financing — subject to FHA loan limits and approval.
- The borrower's previous residence must have been in the disaster area and destroyed or damaged to the point that it must be rebuilt or replaced.
- The application generally must be made within a set time after the disaster declaration.
- Credit guidelines may be applied with some flexibility for disaster-related disruptions, subject to lender review.
- The new home doesn't have to be in the disaster area.
Eligibility rules, disaster declarations, and deadlines are covered in depth on FHA 203(h) Disaster Loans.
FHA Energy Efficient Mortgage (EEM)
An FHA Energy Efficient Mortgage lets a borrower add the cost of cost-effective energy improvements to an FHA purchase or refinance loan, without needing extra qualifying income for that added amount. Examples include insulation, energy-efficient windows, high-efficiency HVAC, water heaters, and in some cases solar.
- Energy assessment. A qualified energy rater evaluates the home and recommends improvements.
- Cost-effectiveness test. Generally, the improvements' expected energy savings over their useful life must be at least equal to their cost.
- Limit on the add-on. HUD caps how much can be added based on the home's value and area limits.
- Completion. Work is generally completed after closing, with funds held in escrow until verified.
Fewer lenders offer EEMs than standard FHA loans, and HUD's rules for them change from time to time. Matthew will confirm whether an EEM is available for your purchase and how the numbers work. Official program information is at HUD.gov.
Good Neighbor Next Door (GNND)
HUD's Good Neighbor Next Door program offers a discount off the list price of certain HUD-owned single-family homes in designated revitalization areas to eligible:
- Full-time pre-K through 12th grade teachers
- Full-time law enforcement officers
- Firefighters
- Emergency medical technicians
In exchange, the buyer generally must commit to living in the home as their only residence for a set period (HUD currently requires three years), and HUD records a “silent” second mortgage for the discount amount that is reduced over the occupancy period. Eligible homes are listed for a limited time on the HUD Home Store, and demand can be high — buyers are generally chosen by lottery when more than one eligible buyer submits.
Buying a HUD home with FHA financing
When an FHA-insured loan ends in foreclosure, HUD often takes ownership of the home and resells it. These “HUD homes” are listed on the HUD Home Store and are sold as-is. Anyone can bid, but owner-occupant buyers generally get an exclusive early bidding period before investors can bid. Bids are submitted through a HUD-registered real estate broker.
HUD homes can be purchased with FHA financing when the property qualifies. HUD's listings generally show whether a home is:
| Listing status | What it generally means |
|---|---|
| Insurable (IN) | Eligible for a standard FHA loan, subject to appraisal and approval |
| Insurable with escrow (IE) | Eligible for FHA with a repair escrow for certain repairs completed after closing |
| Uninsured (UI) | Not eligible for a standard FHA loan as-is; may fit a 203(k) renovation loan, cash, or other financing |
HUD homes can be good opportunities, but they come with as-is condition, strict deadlines, and HUD's own contract forms. Matthew can review a specific listing's FHA status and whether a property standards issue would push you toward a 203(k).
Frequently asked questions
Is a 203(b) loan the same as a regular FHA loan?
Yes. Section 203(b) is the standard FHA-insured mortgage for buying or refinancing a 1–4 unit primary residence. Most FHA loans are 203(b) loans.
Can I combine an FHA 203(k) with a HUD home?
Often, yes. HUD homes listed as uninsured or needing repairs can be good candidates for a 203(k), subject to the property and program rules. See FHA 203(k) Info.
Does the 203(h) program really allow no down payment?
Generally, yes — eligible disaster victims can finance with no down payment, subject to FHA loan limits, timing rules, and approval. See FHA 203(h) Disaster Loans.
Who can use Good Neighbor Next Door?
Eligible full-time teachers (pre-K through 12), law enforcement officers, firefighters, and EMTs who commit to living in the HUD home for the required period. Homes are limited to designated revitalization areas.
Do all lenders offer Energy Efficient Mortgages?
No. EEMs are less common than standard FHA loans. Matthew can confirm whether one is available for your purchase or refinance.
Ask Matthew about your FHA home loan
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