It is also known as the renovation loan. The 203(k) is a FHA (government) program that allows families to buy the home that they would normally pass up because it needs repairs or updating. The 203(k) allows new owners to remodel and roll those costs into their primary mortgage and pay if off over 30 years.
More information: http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kabou
Green Real Estate Appraiser 