We Provide Mortgage Acquisition and Rehabilitation Services:
Choosing a HUD 203k Consultant prior to making an offer on a property is a great idea. Your HUD Approved 203K Consultant can help you make an informed decision before you buy.
The FHA 203k Consultant will make an onsite visit and provide an idea of potential rehab costs and FHA requirements, which may allow you to negotiate a better purchase price.
Consulting services
Assure that all HUD minimum standards are met. The 203k Consultant incorporates the clients desired improvements which the Consultant believes will enhance the home.
Plan review
An FHA 203K Consultant will be familiar with property values, and the type of improvements that will enhance a home's value. These suggestions can assist the home buyer and help establish an excellent equity position once the renovation is complete.
Fee inspection
A 203K Feasibility Study, will insure that all HUD/FHA minimum standards are met. The 203K Consultant incorporates the clients desired improvements with improvements, which the Consultant believes will enhance the home, while meeting all HUD Health and Safety Standards.
203(k) Consultant Fee Schedule
(As Established By HUD)
|
REPAIR AMOUNT |
CONSULTANT FEE |
|
$5,000 -7,500 |
$400 |
|
$7,501-15,000 |
$500 |
|
$15,001-30,000 |
$600 |
|
$30,001-50,000 |
$700 |
|
$50,001-75,000 |
$800 |
|
$75,001 -100,000 |
$900 |
|
$100,000 and up |
$1,000 |
F.A.Q's:
What People asked about 203k Consulting Services
Here's what people are asking about 203k consultants.
Q: What is the FHA 203k loan program?
A: The Federal Housing Authority's 203k loan program is HUD's primary program for the rehabilitation and repair of single-family properties. By offering funds to both purchase and rehabilitate properties, it is an important tool for community and neighborhood revitalization efforts and for expanding homeownership opportunities.
Q: What is an FHA Section 203k loan?
A: The 203k is a Federal Housing Administration (FHA) mortgage insurance program, which enables homebuyers and homeowners to finance both the purchase (or refinance) of a house and the cost of its rehabilitation through a single mortgage, or to finance the rehabilitation of their existing home. The minimum amount that can be borrowed is $5,000.
Q: What is a Streamline loan?
A: The FHA Streamline(k) Limited Repair Program allows borrowers to finance upgrades and improvements up to $35,000 in mortgage funds. There is no minimum threshold. Rehab funds are held in escrow by the lender and disbursed as work is completed. General contractors and consultants are not required. The lender is responsible for the feasibility study. All standard FHA guidelines apply. The property must be 100% complete and at least one year old.
Q: What does a 203k consultant do?
A: The consultant meets with the borrower at the site to determine if the project is feasible. If the client and consultant sign an agreement to go forward, the consultant will prepare a detailed report that includes project specifications, a construction cost analysis and HUD-required draw request forms. The consultant will then prepare contractor bid packages and lender packages. After the loan has been approved, a rehabilitation escrow account is created. Funds are dispersed after HUD-approved inspections are complete.
Q: What is determined in a feasibility analysis?
A: When a property is located, the homebuyer and real estate professional (agent, broker or 203k consultant) should determine:
How much rehab work will be required
How much will the rehab and repairs cost
How much will the property be worth, once the planned rehab work is completed. (It is important to know early in the process whether or not the value of the property will be greater than the cost of the improvements.)
After the preliminary feasibility analysis is completed, a sales contract will be executed. Then, the homebuyer will choose an FHA-approved lender. How much does a 203k Consultant cost?
Q: How much does a 203k consultant cost?
A: While prices may vary slightly, HUD has established a general fee schedule for 203k consultants based on the following ranges for repair costs.
REPAIR AMOUNT CONSULTANT FEE
$5,000 - $7,500 $400
$7,5001 - $15,000 $500
$15,001 - $30,000 $600
$30,001 - $50,000 $700
$50,001 - $75,000 $800
$75,001 - $100,000 $900
$100,001 and up $1,000
While a 203k Consultant is recommended for facilitating a 203k loan, a consultant is not needed for a Streamline(k) loan.
Q: What types of repairs are eligible under the 203k program?
Following is a list of eligible repairs:
* Roofs, gutters, and downspouts
* Upgrade of existing HVAC systems
* Upgrade of plumbing and electrical systems
* Flooring
* Exterior decks, patios, porches
* Weatherization – including storm windows/doors, insulation, weather stripping, etc.
* Purchase and installation of new appliances
* Disability access improvements
* Lead-based paint stabilization or abatement of lead-based paint hazards
* Basement finishing/remodeling, which doesn't require structural repairs
* Basement water-proofing
* Window and door replacement
* Exterior wall re-siding
* Septic system and/or well repair or replacement
Q: What improvements are NOT eligible under the FHA Streamline(k) Limited Repair Program?
A: Following is a list of non-eligible repairs:
*New constructions including room additions
*Repair of structural damage
*Repairs requiring detailed drawings or exhibits
*Any improvement that will take longer than 3 months
*Foundation Repairs or new foundations on existing manufactured homes
*Pool repairs
*Landscaping or site-amenity improvements
Q: When can construction of the property begin?
A: Construction can begin after the loan closes and a rehab escrow account has been set up. The homeowner has up to six months to complete the work. Some lenders may require less than six months.
Q: When are funds disbursed from the rehab escrow account?
Funds are released after the work has been inspected by a HUD-approved inspector. A maximum of four draw inspections, plus a final inspection are allowed.
Q: Am I required to make payments on the rehab escrow amounts that have not been disbursed?
A: Yes. After the closing, the borrower must make mortgage payments on the entire principal amount of the mortgage, which includes the amount in the escrow account that has not yet been disbursed.
Q: What happens if there are unused contingency funds in my escrow account?
A: Your lender must use those funds to prepay the mortgage principal. There is no cash back to the borrower.
Q: Can I choose any contractor to perform the work?
A: Some lenders have a preferred list of contractors that meet their criteria. Be sure to ask your lender about their contractor criteria before hiring a contractor.
Q: Is a condominium eligible for a 203k loan?
A:Yes. With a streamline loan, the unit must be owner-occupied. Rehab is limited to the interior
Q: What Services Do I Expect to Receive by Hiring you?
A: You will receive the following services under 203 K Consultancy:
While HUD does not guarantee the quality of work an FHA 203k consultant provides, we have stood the test of time by being a HUD Approved 203k Consultant. As you know purchasing a home is one of the most important investments you will ever make. When only the best will do.
FHA 203K Streamline Feasibility Study
FHA 203K Full Specification of Repairs
FHA 203K Scope of Work
FHA 203K Full 203k
FHA 203K Energy Efficiency Mortgage (EEM)
FHA 203K Draw Inspections
FHA 203K Project Management
HUD 203K Consultant Services
Project Consultation – 1 time fee
I. We Conduct A Site Visit
The 203K Consultant meets with the borrower at the site.
A Fesibility Study is done to make sure the property meets FHA 203k Guidelines.
If feasible, the buyer signs Consultant Agreement and pays Consultant a retainer fee.
II. We prepares a detailed Work Write-Up which contains:
Construction cost analysis
Clear, concise project specifications
HUD required draw request forms
Preparation of contractor bid packages
Preparation of lender packages
III. We delivers the Work Write-Up Packages
Borrower
Lender
Contractor
IV. Selection of a Contractor by the Borrower
The Borrower selects a contractor. Borrowers should be aware that many lenders may have contractor qualification criteria. Some lenders maintain a list of contractors that have met their qualification criteria. Discuss contractor selection with your lender to learn about their contractor requirements. If you’re considering a contractor which has not yet been approved by your lender or has never done a 203(k), it is important that they are informed early on about the 203(k) concept as it applies to contractors.
V. Loan Closes
Repair funds are placed in escrow.
Construction Starts.
VI. We as your 203K Consultant Perform Draw Request Inspections
1st Draw - Consultant insures permits were issued.
2nd and 3rd Draw - Draw request inspections are performed as work progresses.
4th Draw - A punch list is established.
5th Draw - The project is closed out and warranties and lien releases collected.
For more info regarding HUD programs please click here!
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