203k Renovation Loan Consultant
What is a 203k?
FHA’s 203K loan program is designed to finance the purchase and renovation of a home. With this product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.
To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible. An existing house (or modular unit) on another site can be moved onto the mortgaged property; however, release of loan proceeds for the existing structure on the non-mortgaged property is not allowed until the new foundation has been properly inspected and the dwelling has been properly placed and secured to the new foundation. The Department also permits Section 203(k) mortgages to be used for individual units in condominium projects that have been approved by FHA.
What improvements are eligible under 203K loan?
- One or two story additions
- Basement waterproofing
- Window and door replacements and exterior wall re-siding
- Repair/Replacement of flooring
- Minor remodeling, such as kitchens, which does not involve structural repairs
- Painting, both exterior and interior
- Weatherization, including storm windows and doors, insulation, weather stripping, etc.
- Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
- Accessibility improvements for persons with disabilities
- Lead-based paint stabilization or abatement of lead-based paint hazards
- Repair/replace/add exterior decks, patios, porches
- Basement finishing and remodeling, which does not involve structural repairs
- Septic system and/or well repair or replacement
- Repair/Replacement of roofs, gutters and downspouts
- Repair/Replacement/upgrade of existing HVAC systems
- Repair/Replacement/upgrade of plumbing and electrical systems
Who is a 203K Consultant?
The 203(k) consultant is an individual that has been designated by a HUD field Office for the purpose of completing the Work Write-Up/Cost Estimate and the required architectural exhibits for the borrower.
Duties of 203K Consultant:
I. Site Visit:
- Consultant meets with the borrower at the site.
- A general examination of the work to be done determines if the project is feasible.
- If feasible, Client signs Consultant Agreement and pays Consultant a retainer fee.
II. Consultant prepares a detailed Report which contains:
- Clear, concise project specifications
- Construction cost analysis
- HUD required draw request forms
- Preparation of contractor bid packages
- Preparation of lender packages
III. Consultant delivers the Report Package:
- IV. Selection of a Contractor by the Borrower:
The Borrower selects a contractor.
Buyers please note, banks have certain requirements for contractors, find out what they are.
V. Loan Closes:
- Repair funds are placed in escrow.
- Remodeling begins.
VI. Consultant Performs Draw Request Inspections:
- 1st Consultant insures permits were issued.
- 2nd and 3rd Draw request inspections are performed as work progresses.
- 4th A punch list is established.
Other 203k Services offered:
- Draw Inspections
- Exit Inspections or Consultant Take Overs
- Home Inspections
- Radon Testing