Which type of financing does the FHA 203(k) loan NOT cover?

The FHA 203(k) loan program is designed specifically to assist homebuyers in purchasing and rehabilitating properties that need repairs or renovations. While it does allow for the purchase of a home and provides funds for rehabilitation, the program is not intended for new construction.

The key aspect of the FHA 203(k) loan is its focus on properties that can be fixed up rather than building an entirely new home from the ground up. Therefore, new construction does not fall under the coverage of this particular financing option.

Refinancing existing mortgages can be part of the 203(k) process if the homeowner intends to renovate, but it is a secondary component of the program. This reinforces the idea that the primary function of the loan revolves around the purchase and improvement of existing homes rather than facilitating new construction.