This is an FHA program which a buyer would use if the property they are purchasing needs work prior to moving in. FHA loans require that the house be in move-in condition to qualify. If the house needs work (peeling paint, new roof etc), then you need to do a 203K loan.
These can be complicated to do and will take longer than a regular loan to close. You have to get estimates from contractors and then you take out a mortgage for the purchase price plus the repair costs. The bank will then give the money to the contractors as the work is done.
For qualification, you have to be able to afford the mortgage and you have to find a bank who does 203K's. not all do it.