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203k Calculator - Steps for Processing

The basic procedure for processing 203k Calculator includes the following:

• Get case information
• Enter or update case information
• Step 1: Establishing Financeable Repair and Improvement Costs, Fees and Reserves
• Step 2: Establishing Value - Purchase Case
  or Step 2: Establishing Value - Refinance Case
• Step 3: Calculating Maximum Mortgage - Purchase Case
  or Step 3: Calculating Maximum Mortgage - Refinance Case
• Step 4: Additions to Base Mortgage Amount
• Step 5: Calculating the LTV
• Step 6: Establishing the Rehabilitation Escrow Account
• Submit for processing

Getting Case Information

1. On the 203k Calculator Request page, enter the case number assigned to the mortgage in the FHA Case Number field.
   
   
2. Click Send. The 203k Calculator page appears if processing is successful. Some of the fields on the 203k Calculator page may be pre-filled.
   
   -or-
   
   If there is an error or a prerequisite that must be satisfied, the 203k Calculator Request page appears with an error message above the FHA Case Number and an Error(s) Detected field below it in the Details section. Review the information in these fields. If appropriate, make the required correction and process again.
   

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Entering or Updating Case Information

In the Case Information section of 203K Calculator, information is added or updated as follows:

Property Address and Borrower Data

The pre-filled information in the Property Address and Borrower Data subsections is the information that was entered for Case Number Assignment. To update this view-only information, use Borrower/Address Change.

Case Characteristics

1. The pre-filled information in the 203k Type, Purchase/Refinance, Condominium, and Secondary Residence fields in the Case Characteristics subsection is the information that was entered for Case Number Assignment. To update this view-only information, use Case Number Assignment.
   
   
2. For a case identified as HUD Real Estate Owned (REO) through Case Number Assignment, specify whether the property is being purchased under the FHA $100 Down Sales Incentive by making a selection from the drop-down list in the REO Type field (REO, not $100 down or $100 down). If this is not a HUD REO case, select Not REO.
   
   
3. Enter the effective Fair Isaac Corporation (FICO) credit score for the borrower in the Minimum Decision Credit Score field (three digits).
   
   -or-
   
   For a borrower with non-traditional or insufficient credit, enter N/A. Note: The maximum loan-to-value (LTV) factor is 96.5% for a purchase case and 97.75% for a refinance case. If the property is a secondary residence, the maximum LTV factor for a secondary residence is used (85%).
   

   -or-
   
   If FHA TOTAL Scorecard was processed, the Minimum Decision Credit Score field is pre-filled with the value from FHA TOTAL Scorecard. To update this view-only information, resubmit updated information to FHA TOTAL Scorecard.

4. Select Yes from the drop-down list in the EEM field if energy efficient improvements are factored into the mortgage under the Energy Efficient Mortgage (EEM) program. Otherwise, select No.
   
   
5. Select Yes from the drop-down list in the Solar/Wind field if a solar or wind energy system is being installed on the property with proceeds of the loan. Otherwise, select No.
   
   
6. For a refinance case, select the time period within which the property was acquired by the borrower from the drop-down list in the Property Acquired field.
   
   -or-
   
7. 
   If Appraisal Logging was processed, the Property Acquired field is pre-filled with the information from Appraisal Logging. To update this view-only information, use Appraisal Logging.

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Step 1: Establishing Financeable Repair and Improvement Costs, Fees and Reserves

Enter dollar amounts only, without cents, commas, or dollar signs.

1. For Step 1A. Repair and Improvement Costs and Fees Total (sum of Step A1 thru Step A7), do the following:

   •	1. Costs of Construction, Repairs and Rehabilitation: Enter the total cost of eligible improvements to the property (up to 999999). For a Standard 203(k), the amount must be 5000 or greater, up to 999999. Do not include the cost for the installation of a solar or wind energy system in this amount (see Step 4C. Solar Energy System Cost and Installation).
   •	2. Architectural or Engineering Professional Fees: For a Standard 203(k) case, enter the total cost of fees paid for architectural or engineering professional services (up to 99999). Skip this step for a Limited 203(k) case.
   •	3. 203k Consultant Fees: Enter the total cost of fees paid to an FHA-approved 203(k) consultant (up to 99999). Skip this step if a 203(k) consultant is not being used for a Limited 203(k) case or if the Limited 203(k) case was assigned an FHA case number before November 4, 2024.
   •	4. Draw Inspection Fees during Construction Period: Enter the total cost of fees drawn from the escrow account to pay for inspections during rehabilitation of the property (up to 99999). Note: This does not include the cost of inspection fees for an EEM or solar/wind energy system (even if the inspector is also the 203(k) consultant). Instead, these inspection fees must be included in the amount financed for energy efficient improvements.
   •	5. Title Update Fees: Enter the total cost of title update fees (up to 99999).
   •	6. Permit Fees: Enter the total cost of fees paid for required permits (up to 99999). Notes: The total cost of permit fees must be entered even if the borrower is being reimbursed at closing for obtaining the permits, prior to loan disbursement. Permit fees are not the same as draw inspection fees.
   •	7. Feasibility Study (when necessary): Enter the total cost of a study performed to determine if the project is financially feasible (up to 99999). Skip this step for a Limited 203(k) case.
   The system-calculated sum of these items is displayed in the view-only Step 1A. Repair and Improvement Costs and Fees Total (sum of Step A1 thru Step A7).

   
   
2. For a Standard 203(k) case, enter the amount of financeable funds that are set aside to cover unforeseen project costs in Step 1B. Financeable Contingency Reserves, rounded down to the nearest dollar (up to 999999). The contingency reserve fund is established as a percentage of the financeable repair and improvement costs. It does not include an amount that may be provided from the borrower's own funds. The sum of Step 1B. Financeable Contingency Reserves and Step 6D. Borrower’s Own Funds for Contingency Reserves must meet or exceed the minimum required contingency reserves. See Standard 203(k) Contingency Reserve Requirements or HUD Handbook 4000.1 to determine the required minimum and maximum contingency reserve percentages.
   
   -or-
   
   For a Limited 203(k) case, this information is optional. Financed contingency reserve funds may be established by the lender.
   
   Notes:
   

   •	The financeable contingency reserve fund may not exceed 20% of the financeable repair and improvement costs (Step 1A. 1. Costs of Construction, Repairs and Rehabilitation).
   •	If Appraisal Logging was processed, the amount entered in Step 1B. Financeable Contingency Reserves is validated against Appraisal Logging information when the 203k Calculator page is processed.

   
   
3. For a Standard 203(k) case, enter the amount of financeable funds that are set aside to make mortgage payments (i.e. principal, interest, taxes, and insurance (PITI)) when the property cannot be occupied during rehabilitation in Step 1C. Financeable Mortgage Payments Reserves (up to 250000). A mortgage payment reserve is optional, but if the lender chooses to establish one, it cannot exceed 12 months of mortgage payments. (Note: It cannot exceed 99999 for a Standard 203(k) case assigned an FHA case number before November 4, 2024.) The number of mortgage payments cannot exceed the time frame required for completion set forth in the Rehabilitation Loan Agreement. For a multi-unit property, if one or more units are occupied, the mortgage payment reserve may only include the portion of the mortgage payment attributable to the units that cannot be occupied. Skip this step for a Limited 203(k) case.
   
   
4. For Step 1D. Financeable Mortgage Fees Total (sum of Step D1 and Step D2), do the following:

   •	1. Financeable Origination Fee: Enter the financeable portion of the borrower-paid origination fee (up to 99999). The amount cannot exceed the greater of 350 or 1.5% of the sum of:
   	-	Step 1A. Repair and Improvement Costs and Fees Total (sum of Step A1 thru Step A7).
   	-	Step 1B. Financeable Contingency Reserves.
   	-	Step 1C. Financeable Mortgage Payments Reserves. (This item is not applicable to a Limited 203(k) case.)
   •	2. Discount Points on Repair Costs and Fees: Enter the financeable portion of the borrower-paid discount points on repair costs and fees (up to 99999). It cannot exceed an amount equal to the discount point percentage multiplied by the sum of the following:
   	-	Step 1A. Repair and Improvement Costs and Fees Total (sum of Step A1 thru Step A7).
   	-	Step 1B. Financeable Contingency Reserves.
   	-	Step 1C. Financeable Mortgage Payments Reserves. (This item is not applicable to a Limited 203(k) case.)
   The system-calculated sum of these items is displayed in the view-only Step 1D. Financeable Mortgage Fees Total (sum of Step D1 and Step D2) field.

   
   
5. The total amount for Step 1: Establishing Financeable Repair and Improvement Costs, Fees and Reserves is calculated by the system and displayed in Step 1E. Total Rehabilitation Cost (Step 1 total) (sum of Steps 1A, 1B, 1C and 1D). This view-only amount is adjusted by updating the amounts in the prior fields. For a Limited 203(k) case, the maximum is 75000. Note: For a Limited 203(k) case assigned an FHA case number before November 4, 2024, the maximum is 35000 and 50000 for property located in a QOZ.
   
   Continue to Step 2: Establishing Value - Purchase Case or Step 2: Establishing Value - Refinance Case.

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Step 2: Establishing Value - Purchase Case

Enter dollar amounts only, without cents, commas, or dollar signs.

Adjusted As-Is Value - Purchase Case

To establish the adjusted as-is value of the property for a purchase case, do the following:

1. Enter the contract sales price of the property in Step 2A. Purchase Price (up to 9999999).
   
   -or-
   
   If Appraisal Logging was processed, Step 2A. Purchase Price is pre-filled with the value from Appraisal Logging. To update this view-only information, use Appraisal Logging.
   
   
2. Enter in Step 2B. Inducements to Purchase the amount of certain expenses paid by the seller and/or another interested party on behalf of the borrower that results in a dollar-for-dollar reduction to the adjusted value of the property before applying the appropriate loan-to-value (LTV) percentage (up to 99999).
   
   
3. The amount in Step 2C. Purchase Price Minus Inducements to Purchase is calculated by the system and displays the sum of Step 2A. Purchase Price minus Step 2B. Inducements to Purchase. This field is view only and is adjusted by updating the amounts in Steps 2A and 2B.
   
   
4. Enter the estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date in Step 2D. As-Is Property Value (when an As-Is Appraisal is performed) (up to 9999999).
   
   -or-
   
   If Appraisal Logging was processed, Step 2D. As-Is Property Value (when an As-Is Appraisal is performed) is pre-filled with the value from Appraisal Logging. To update this view-only information, use Appraisal Logging.
   
   
5. Step 2E. Adjusted As-Is Value displays the view-only amount that is the lesser non-zero amount from:

   •	Step 2C. Purchase Price Minus Inducements to Purchase.
   	-or-
   •	Step 2D. As-Is Property Value (when an As-Is Appraisal is performed).

After-Improved Value - Purchase Case

Enter the appraised value of the property subject to completion, repairs, or plans and specifications in Step 2F. Appraised Value (subject to repairs and improvements) (up to 9999999).

-or-

If Appraisal Logging was processed, Step 2F. Appraised Value (subject to repairs and improvements) is pre-filled with the value from Appraisal Logging. To update this view-only information, use Appraisal Logging.

The amount for Step 2F. Appraised Value (subject to repairs and improvements) must be greater than the amount for Step 2D. As-Is Property Value (when an As-Is Appraisal is performed).

Continue to Step 3: Calculating Maximum Mortgage - Purchase Case.

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Step 2: Establishing Value - Refinance Case

Enter dollar amounts only, without cents, commas, or dollar signs.

Adjusted As-Is Value - Refinance Case

To establish the adjusted as-is value of the property for a refinance case, do the following:

1. Enter the total amount of existing debt on the property in Step 2A. Existing Debt on Property Being Refinanced (up to 9999999).
   
   
2. Step 2B. Step 1 Total (Step 1E) displays the amount from Step 1E. Total Rehabilitation Cost (Step 1 total) (sum of Steps 1A, 1B, 1C and 1D). This field is view only and is adjusted by updating the amounts in Step 1: Establishing Financeable Repair and Improvement Costs, Fees and Reserves.
   
   
3. Enter the projected mortgage closing costs and prepaid items (e.g., flood and hazard insurance premiums, MIP, real estate taxes, and per diem interest) in Step 2C. Fees Associated with the New Loan (up to 99999).
   
   
4. Step 2D. Sum of Step 2A, Step 2B and Step 2C displays the system-calculated sum of Step 2A. Existing Debt on Property Being Refinanced, Step 2B. Step 1 Total (Step 1E), and Step 2B. Fees Associated with the New Loan.
   
   This field is view only and is adjusted by updating the amounts in Steps 2A, 2B, and/or 2C.
   
   Note: For a refinance case, an as-is appraisal is required if the sum of Step 2A. Existing Debt on Property Being Refinanced and Step 2B. Step 1 Total (Step 1E) is greater than Step 2G. Appraised Value (subject to repairs and improvements). If the property was acquired less than 12 months prior to the Case Number Assignment date, an as-is appraisal is always required (if not acquired by gift or inheritance through a family member).
   
   
5. Enter the estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date in Step 2D. As-Is Property Value (when an As-Is Appraisal is performed). Leave the field blank if an as-is appraisal was not performed.
   
   -or-
   
   If Appraisal Logging was processed, Step 2D. As-Is Property Value (when an As-Is Appraisal is performed) is pre-filled with the value from Appraisal Logging. To update this view-only information, use Appraisal Logging.
   
   
6. Step 2F. Adjusted As-Is Value displays the view-only amount calculated by the system that is the (a) adjusted as-is value of the property, if an as-is appraisal was performed, or (b) sum of Step 2A. Existing Debt on Property Being Refinanced and Step 2C. Fees Associated with the New Loan.

After-Improved Value - Refinance Case

Enter the appraised value of the property subject to completion, repairs, or plans and specifications in the Step 2G. Appraised Value (subject to repairs and improvements) field.

-or-

If Appraisal Logging was processed, the Step 2G. Appraised Value (subject to repairs and improvements) field is pre-filled with the value from Appraisal Logging. To update this view-only information, use Appraisal Logging.

Continue to Step 3: Calculating Maximum Mortgage - Refinance Case.

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Step 3: Calculating Maximum Mortgage - Purchase Case

The fields in this step are view only, except for a HUD REO purchase case (see below) and display system-calculated amounts. See the field descriptions for Step 3: Calculating Maximum Mortgage - Purchase Case. Adjustments to the view-only amounts are made by updating the source(s) of information.

For a HUD REO purchase case only, enter the amount of the credit adjustment provided by HUD at sales closing associated with a lead-based paint stabilization plan for Step 3C. Less Lead-Based Paint Credit. Enter a dollar amount only, without cents, a comma, or dollar sign (up to 99999). Otherwise, this field is view only. Note: The sales contract must include a stipulation for the lead-based paint credit adjustment.

Continue to Step 4: Additions to Base Mortgage Amount.

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Step 3: Calculating Maximum Mortgage - Refinance Case

The fields in this step are view only and display system-calculated amounts, except as stated below. See the field descriptions for Step 3: Calculating Maximum Mortgage - Refinance Case. Adjustments to the view-only amounts are made by updating the source(s) of information.

Continue to Step 4: Additions to Base Mortgage Amount.

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Step 4: Additions to Base Mortgage Amount

If the case is an EEM and/or a solar or wind energy system is being installed on the property, information is entered in this step (see below). Otherwise, the fields in this step are view only and display system-calculated amounts. For Step 4G. Final Base Mortgage Amount = Lesser of (sum of Step 4B and Step 4E) or Step 4F, the system-calculated amount is provided after the 203k Calculator page is processed. See the field descriptions for Step 4: Additions to Base Mortgage Amount. Adjustments to the view-only amounts are made by updating the source(s) of information.

1. If Yes was selected in the EEM field in the Case Information section, enter the total amount of cost-effective energy efficient improvements being financed under the EEM program in Step 4A. Energy Efficient Improvement Amount (EEM). Include the fees for a home energy assessment by a qualified energy rater, but not draw inspection fees. Enter a dollar amount only, without cents, a comma, or dollar sign (up to 99999). If No was selected, this field is view only.
   
   
2. If Yes was selected in the Solar/Wind field in the Case Information section, enter the total cost for installing a solar or wind energy system on the property in Step 4C. Solar Energy System Cost and Installation. Enter a dollar amount only, without cents, a comma, or dollar sign (up to 99999). If No was selected, this field is view only.
   
   Note: The cost for the installation of a solar or wind energy system entered here must not also be included in Step 1A. 1. Costs of Construction, Repairs and Rehabilitation.

Continue to Step 5: Calculating the LTV.

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Step 5: Calculating the LTV

Annual MIP LTV

Step 5A. MIP LTV = Step 4G Divided by Step 2F (i.e., Final Base Mortgage Amount divided by After-Improved Value) for a purchase case and Step 5A. MIP LTV = Step 4G Divided by Step 2G (i.e., Final Base Mortgage Amount divided by After-Improved Value) for a refinance case, are view-only fields that display the system-calculated loan-to-value (LTV) ratio for determining the annual mortgage insurance premium (MIP) rate after the 203k Calculator page is processed.

Case LTV

Step 5B. Case LTV = Step 4G Divided by Lesser of Step 3A or Step 3B for a purchase case and Step 5B. Case LTV = Step 4G Divided by Lesser of Step 3B or Step 3C for a refinance case, are view only fields that display the system-calculated loan-to-value (LTV) ratio for the case based on the maximum allowable mortgage amount after the 203k Calculator page is processed.

Adjustments to these values are made by updating the source(s) of information.

Continue to Step 6: Establishing the Rehabilitation Escrow Account.

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Step 6: Establishing the Rehabilitation Escrow Account

The fields in this step are view only and display system-calculated amounts, except for steps 6D and 6F explained below. See the field descriptions for Step 6: Establishing the Rehabilitation Escrow Account. Adjustments to the view-only amounts are made by updating the source(s) of information.

1. If all or part of the contingency reserves are being provided through the borrower's own funds, enter the amount in Step 6D. Borrower’s Own Funds for Contingency Reserves. Enter a dollar amount only, without cents, a comma, or dollar sign (up to 999999). Note: The sum of Step 1B. Financeable Contingency Reserves and Step 6D. Borrower's Own Funds for Contingency Reserves must meet or exceed the minimum required contingency reserves.
   
   
2. For Step 6F. Initial Draw at Closing Total (sum of Step F1 thru Step F7), do the following (enter dollar amounts only, without cents, commas, or dollar signs):
   
   

•	1. 203k Consultant Fees: Enter the portion of the fees paid to an FHA-approved 203(k) consultant, not to exceed the amount in Step 1A. 3. 203k Consultant Fees (up to 99999). Note: Skip this step if a 203(k) consultant is not being used for a 203(k) Limited case or if the 203(k) Limited case was assigned an FHA case number before November 4, 2024.
•	2. Architectural or Engineering Professional Fees: For a Standard 203(k) case, enter the portion of the fees paid for architectural or engineering professional services, not to exceed the amount in Step 1A. 2. Architectural or Engineering Professional Fees (up to 99999). Skip this step for a Limited 203(k) case.
•	3. Permit Fees: Enter the portion of the fees paid for required permits that are reimbursed at mortgage closing through a draw of the escrow funds, not to exceed the amount in Step 1A. 6. Permit Fees (up to 99999). Note: Permit fees can only be financed if there is documentation showing the borrower paid for the permit fees prior to closing.
•	4. Origination Fees: Enter the portion of the fees paid for the origination of the mortgage, not to exceed the amount in Step 1D. 1. Financeable Origination Fee.
•	5. Discount Points on Repair Costs and Fees: Enter the portion of the fees paid for discount points on repair costs and fees, not to exceed the amount in Step 1D. 2. Discount Points on Repair Costs and Fees (up to 99999).
•	6. Material Cost for Items Ordered and Prepaid by Borrower or Contractor (under contract for delivery): For a Standard 203(k) case, enter the portion of the material cost of items prepaid by the borrower in cash or by the contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date (up to 99999). Skip this step for a Limited 203(k) case.
•	7. Up to 50% of Material Cost for Items Ordered but Not Yet Paid for (under contract for delivery): Enter the portion of the material costs (not to exceed to 50%) for items not yet paid for by the borrower or contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date (up to 99999).
The system-calculated sum of these items is displayed in the view-only Step 6F. Initial Draw at Closing Total (sum of Step F1 thru Step F7). This is the total portion of costs and fees that are reimbursed at mortgage closing through a draw of the escrow funds.

Submit for Processing

When all of the required information has been entered on the 203k Calculator page, click Send. If processing was successful, the 203k Calculator Results page appears with this Success Message near the top of the page: 203k Calculator Successfully Completed.

The system-calculated amounts for the following are displayed:

-or-

If there was an error, the 203k Calculator page appears with an error message near the top of the page and an Error(s) Detected field in the Details section near the bottom of the page. Review the information in these fields. Make any necessary corrections and process again.

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See Also

203k Calculator - Business Background

203k Calculator Request Page - Field Descriptions

203k Calculator Page - Field Descriptions

203k Calculator Results Page - Field Descriptions

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