The FHA 203k Limited is the lighter version of FHA's renovation loan. It's built for houses that are sound but dated or worn: a roof at the end of its life, a 60-year-old kitchen, a failing boiler, windows that won't open. You buy the house and finance up to $75,000 of repairs in the same FHA loan.
Since HUD raised the cap from $35,000 to $75,000 in late 2024, the Limited 203k now covers most of the projects Philadelphia buyers actually take on, as long as none of the work is structural.
What the Limited 203k covers
- Roof replacement, gutters, and downspouts
- Kitchen and bathroom remodels that don't move structural walls
- Furnace, boiler, water heater, and central air
- Electrical panel and wiring upgrades, plumbing replacement
- Windows, doors, siding, and exterior paint
- Flooring, drywall, and interior paint
- Basement waterproofing that doesn't require structural repair
- Lead-based paint stabilization and other repairs flagged on an FHA appraisal
- Accessibility and energy-efficiency improvements
What it can't cover
Structural repairs, additions, room reconfiguration that touches load-bearing walls, and any job that makes the home uninhabitable for more than 30 days. If your list includes any of those, use the FHA 203k Standard.
How the loan amount is set
The math is the same as the Standard program. FHA uses the lesser of the purchase price plus repair costs, or 110% of the as-completed appraised value. You finance up to 96.5% of that, up to the county's FHA limit. In the Philadelphia metro, that limit is $630,200 for a single-family home in 2026.
How the process works
- Pre-qualify and set your price-plus-repair budget.
- Get the contractor bid during your inspection period. The bid is the scope of work.
- Appraisal based on the as-completed value.
- Close. Repair funds go into escrow.
- Draws. The contractor is paid in a small number of stages as the work is completed and inspected. We walk your contractor through the draw paperwork before closing so there are no surprises.
The Limited 203k in Philadelphia
The Limited 203k fits the Philadelphia house that is structurally sound but has not been touched in decades. Estate sales in Port Richmond, South Philly, and the Northeast fit that description, and so do plenty of Delaware County twins and Bucks County ranches. The work is usually the same list: roof, heat, electric, paint, kitchen, and bath.
Where it fits best
- Port Richmond, Pennsport and Whitman, and Mayfair. Long-time owners, well-built brick rowhomes, and original kitchens. These are ideal Limited 203k purchases.
- Upper Darby, Drexel Hill, and Havertown. 1920s to 1940s twins with older boilers and radiators, small kitchens, and original baths.
- Levittown. The houses were built all at once in the 1950s, so the budgets are predictable: failed radiant floor heat, original kitchens, small baths, roofs, and windows.
A worked example
A buyer goes under contract on a Port Richmond estate-sale rowhome at $265,000. The inspection calls for a new flat roof, a boiler, a 200-amp electrical service, lead-safe paint stabilization, and new windows. The buyer adds a kitchen and a bath. The contractor's bid is $58,000.
- Purchase: $265,000
- Renovation: $58,000
- Contingency at 10%: $5,800
- Total: $328,800
- 3.5% down: about $11,508
- Base loan: about $317,292
The rehab total of $63,800 stays under the $75,000 cap with room left for any financed fees. The loan is far below the 2026 FHA limit of $630,200.
Illustration only. Your numbers depend on the appraisal, the bid, and your qualification.
Local rules and timing
In Philadelphia, most home improvement contractors need a Pennsylvania Home Improvement Contractor registration and must meet the City's insurance and tax requirements to pull L&I permits. Electrical and plumbing work requires licensed trades. Almost every rowhome predates 1978, so the contractor should follow lead-safe practices. In Upper Darby, the township's use and occupancy inspection at sale can flag items, and those items can be folded into the scope.
A Limited 203k can occasionally close in about 30 days when the bid is ready up front. Plan on 45 to 60. Most projects finish in two to four months, well inside the nine months HUD allows.
Common pitfalls
- Rear walls. A bowing rear wall is structural. If the inspector finds one, the file moves to the Standard 203k.
- The cap includes everything. The $75,000 covers contingency and financed fees, not only the contractor's price.
- Skipping the sewer camera. Clay laterals are common. A camera inspection before you set the budget is cheap insurance.
- One-line bids. "Kitchen: $40,000" won't pass. See how to find a 203k contractor in Philadelphia.
If an FHA appraiser has already flagged repairs on your house, read what to do when a rowhome fails inspection.
Frequently asked questions
Will a Limited 203k cover a flat roof and parapet repair on a rowhome?
Yes, as long as the work is roofing and masonry repair and not structural rebuilding. Roofs, parapets, and flashing at the party walls are some of the most common Limited 203k items in Philadelphia.
Can a Limited 203k pay for the items Upper Darby's use and occupancy inspection flags?
Usually, yes. Non-structural items flagged at the township inspection can be added to the renovation scope and paid through the loan's draw process.
Is the Limited 203k a good fit for a Levittown house with a failed radiant heat system?
Often, yes. Replacing the heating system is non-structural work, and Levittown budgets tend to be predictable. If the plan grows to include an addition or second-floor expansion, that is structural and calls for the Standard 203k or HomeStyle.
What is the maximum on a Limited 203k?
HUD raised the Limited 203k cap from $35,000 to $75,000 for FHA case numbers assigned on or after November 4, 2024. The cap covers the total rehabilitation cost, including contingency and financed fees.
Is a HUD consultant required on the Limited 203k?
No, a consultant isn't required on the Limited program, though one can be used and the fee can now be financed. For older houses with a long repair list, a consultant's inspection is often worth it.
What can't the Limited 203k pay for?
Structural work (moving or replacing load-bearing walls, foundation repairs, additions), landscaping and site work beyond what's needed for health and safety, and any repair that would keep you out of the home for more than 30 days.
How long do I have to finish the work?
The Limited 203k allows up to nine months to complete the renovation.