An FHA 203k loan is a loan that enables homeowners and buyers to take out money for the home along with the amount needed for any repairs or renovations, as stated by the Department of Housing and Urban Development. This type of loan can function similar to refinancing for someone who already owns the home.
To qualify for this type of loan, a potential loan recipient needs the qualifying down payment and correct debt to income ratio, according to the Realtor website. The process is very similar to qualifying for a regular home loan. Documentation of income and resources are another requirement for all types of FHA loans.