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Realtors and consumers who read the governmental loan program capabilities are often surprised that lender rarely follow the rules and add stricter guidelines.  This is allowed by HUD.  Banks may add guidelines, but they are not permitted to loosen guidelines.  This can lead to confusion.  Different banks have different rules for the same, governmental loan program.  Those banks which stick closer to the HUD rules often will have slightly higher rates as they are assuming higher risk than banks which add "overlays."  So, while an FHA 203K (rehab) loan may permit an owner/contractor, most banks will not permit the owner, even if a licensed contractor, to perform his or her own work, even though FHA allows it. 

There are other examples of overlays too.  The most common is the FICO score requirement.  Most banks have gone to a minimum 640 FICO score, FHA has no actual score requirement (although there has been a move afoot to impose one).

The moral of the story is to do your homework.  Find out which banks have what overlays.  Or contact my office with your questions.