What is a “FHA 203K Loan”?

My fiance and I are looking at a house that we want to but with a FHA loan. The house needs updated alot so we offered to pay the seller full asking price if he gave us 10k to re Model.
Well he counter offered with full asking price and 5k to remodel.
5 is not going to be enough. I just know it.

I don't know much about this kinda stuff so my question is..will we be able to offer him more then asking price so we can get 10k and he still gets what he wants out of the house?
Or is that against and FHA loan rules? Will FHA say that the house isn't worth what we offer?
The price we want to offer is 10k less then we were pre approved for.
The mortgage guy said we could try to get a FHA 203k loan.
But I don't know what this is and how it will help.
Can some onepleasee help?
I know that they give you money for rehab but don't you have to have the money upfront or a credit card to cover the cost then get reimbursed by them?
Say the asking price is 154,900 and we offered to pay full and get 10k back. The seller counter offers full asking price and 5k back.
Can I call my realtor and say I want to offer 160k & get 10k back so he still comes out at 150k?

Will it matter if the FHA aprasier says the house is only worth 154,900?

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One Response to “What is a “FHA 203K Loan”?”

  1. diana says:

    its not against fha rules, the fha appraiser will determine whether the home is worth that amount though. a friend of mine offered $30,000 more than the asking price as long as the house was repaired and fha financed it.

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