What changed in November 2024, and how the two versions differ
HUD rewrote the 203(k) program in Mortgagee Letter 2024-13, mandatory for case numbers assigned on or after November 4, 2024. Four things moved, and all four help on an old house.
The Limited 203(k) cap went from $35,000 in total rehabilitation costs to $75,000. The Limited completion period went from six months to nine. The Standard completion period went from six months to twelve. And the 203(k) consultant’s fee, which used to be an ineligible cost on a Limited, became financeable.
Those are the 2026 rules. The December 2025 loan-limit letter changed the dollar limits, not the 203(k) mechanics.
| Limited | Standard | |
|---|---|---|
| Rehab cost | Up to $75,000 total | At least $5,000, no fixed cap beyond the FHA limit |
| Scope | Minor remodeling and nonstructural repairs | Structural work, additions, major rehab |
| Consultant | Not required; fee financeable if you use one | Required, from the FHA roster |
| Time to finish | 9 months | 12 months |
| Payment reserve | Not financeable | Up to 12 months of payments, financeable |
Both work on one to four unit properties. Both are FHA loans underneath, so 3.5% down at a 580 score, the 1.75% upfront premium and the annual premium all behave the way they do on a regular FHA loan.
What $75,000 buys on a Delco twin
The 203(k) work write-up templates in HUD’s handbook carry a set of required work items, and they read like a list somebody wrote in a 1912 twin on a Tuesday. Lead-safe scraping, priming and painting of all defective paint on a pre-1978 house. Handrail installation. Sewer line replacement, and connection to a public sewer where that’s feasible.
Add the rest of the usual suspects and a Limited covers it. A roof with under two years of remaining life, which is the exact thing the FHA appraiser tests for. A fuse box or an undersized panel. Frayed or exposed wiring in the basement. A water heater with no relief valve. Windows painted shut in a house where the sashes are original. Forty feet of clay lateral under the front yard that the township wants certified before it will hand over a use and occupancy certificate.
What it does not cover is anything structural. Moving a bearing wall, underpinning a foundation, putting a third floor on, adding onto the back: that is a Standard 203(k), with a consultant, a work write-up and twelve months.
The consultant, the fees and the clock
On a Standard the consultant is mandatory and comes off the FHA 203(k) Consultant Roster. HUD caps the fees:
| Service | Maximum |
|---|---|
| Feasibility study | $375 |
| Work write-up, repairs of $50,000 or less | $1,000 |
| Work write-up, $50,001 to $85,000 | $1,200 |
| Work write-up, $85,001 to $140,000 | $1,400 |
| Work write-up, over $140,000 | Lesser of 1% or $2,000 |
| Draw inspection | $375 |
| Change order | $120 |
| Reinspection | $225 |
Add $25 per additional dwelling unit, and mileage at the IRS rate beyond 15 miles. On a Limited, none of this is required, but since the November 2024 rewrite you can hire a consultant and finance the fee, which is worth it when the scope is more than a weekend of drywall.
On a Limited the nine months runs off the Borrower-Contractor Agreement. On a Standard the twelve months runs off the consultant’s work write-up. Standard also lets you finance up to twelve months of mortgage payments into the loan, which is the piece that makes a gut rehab livable when the house isn’t.
Contractors get paid in draws against the write-up as the work clears inspection. Pick a contractor who has done a 203(k) before and can live with that.
Where this fits in Delaware County
The math works best in the twin-and-row belt. July 2026 sold medians were $214,950 in the 19082 part of Upper Darby, $250,000 in the Lansdowne postal area, $199,950 around Darby and $197,500 in Marcus Hook. Buy at those numbers, add $75,000 of work, and you are still a long way under the 2026 FHA limit of $630,200 for a one-unit house.
Two local wrinkles worth knowing before you write the offer. First, under Act 133 of 2016 a township that finds ordinary violations at resale can issue a temporary use and occupancy certificate that lets you move in and fix them, generally inside twelve months, which lines up with a 203(k) timeline. A substantial violation gets a temporary access certificate instead, and nobody occupies the house until it’s corrected. Second, the county’s Homeownership First program allows a rehab mortgage as the first loan, so the $10,000 of down payment help can sit on top of a 203(k) in the towns where the program applies.