Section 203(k) is a unique mortgage loan for homebuyers. If the homebuyer is looking to buy a house that needs repair or modernization, they often have to follow through an expensive and complicated process. Most repair loans often have high-interest rates, short repayment terms, and what is called a balloon payment (a large end-of-term payment). However, a Section 203(k) loan mitigates high costs and complicated term lengths for both the lender and the borrower. 203(k) Loans help with both the acquisition and the rehabilitation of the property, saving the borrower both time and money. They are also insured, thus protecting the lender’s security during the transaction even before the value of the property begins to offer adequate security.