An FHA 203k loan allows you to borrow money, using only one loan, for both home improvement and a home purchase. These loans can also be used just for home improvements, but there might be better options available. 203k loans are guaranteed by the FHA, which means lenders take less risk when offering this loan. As a result, it’s easier to get approved (especially with a lower interest rate).
Some properties are “almost perfect” – the location is good, and the property has potential, but significant improvements need to be made.
Without those repairs, the home might not be suitable for living, and lenders might be unwilling to fund loans on a property with problems.
FHA 203k makes it possible for you to turn that property into a home (and to get that property off the market and make it a valuable part of the community again).