is a good place to read about it. I also have some articles on my blog at http://www.socalfhahomeloans.com
that get into detail about FHA 203k loans. There is the streamline FHA 203k loan if you are doing less than $35,000 in repairs and the repairs are cosmetic. Then there is the standard 203k loan if you go over $35k or the repairs are structural.'
Basically you want to find a good loan officer first to talk your through it. Once you are pre-approved for a FHA 203k and are looking for houses, when you find one you want to make an offer on you'll need to find a contractor that will walk through the house with you and create a detailed estimate of labor and materials for all the repairs you want to do. If you get your offer accepted you will give this estimate to the loan officer who will give it to the appraiser and they will do an appraisal on current value and after repair value.
You only need 3.5% down on a FHA 203k. So if you buy a $300k house and you want to put $30,000 into the lender will lend you $289,500 (not including up front MI) + the $30,000 for a total loan of $319,500. When the loan funds on a streamline FHA 203k you will get 2 draws to pay the contractors to complete the home repairs. When the dust settles you will have a fixed up house and a $319,500 30 year fixed rate loan.