Our FHA Certified 203k Renovation Consultant coordinates and manages 203k renovation and Fannie Mae HomeStyle loan projects in Kansas and Missouri. Our renovation consultants work closely with you, the contractor, and loan officer from start to project finish.
We help ensure your project starts and finish on-time and within budget. It doesn’t matter if you are just exploring to learn more about the program or if you have your loan and you are ready to submit your request for a renovation consultant to get the project started. Our seasoned construction manager turned FHA Certified 203k Renovation Consultant knows exactly what to watch out for and how to guide you through the emotionally draining process to help preserve your sanity. Basically, his job is your satisfaction.
Had a home inspection yet? Ask about us performing your home and termite inspection at the same time as your initial site visit. Ask us during our phone call.
Do I need a Renovation Consultant?
Contact us to assist with your renovation project (816)565-1991.
When you plan to renovate or add to the home with a FHA 203k loan or Fannie Mae HomeStyle loan you are required to work with a Certified FHA 203k Renovation Consultant. Your renovation consultant will coordinate the project and process the required project loan documents. The renovation consultant monitors construction, process payments and ensures project completion. Both homebuyers and current homeowners can benefit from a renovation loan.
The role of the Certified FHA 203k Renovation Consultant is vital to the success of a FHA full 203k loan. The Certified FHA 203k Renovation Consultant is responsible for the onsite visit, the work write up, and is responsible for staying on the project to facilitate payment draws and draw inspections. Think of this person as your very own project manager. The renovation consultant adds a nice layer of comfort and protection to the project. As a result, it is very important that you and your Certified FHA 203k Renovation Consultant communicate openly.
Here is a list of how we make life renovating your home less stressful:
Initial Site Visit
When you contact us to schedule an appointment we are reserving time to review the property. This time is held to understand the work to be performed. We help prevent potential issues by evaluating the property for potential issues that may derail, delay or cause cost overruns.
The renovation consultant performs a thorough examination of the property at the initial site visit. We provide an assessment of the project’s feasibility under the 203k loan requirements.
Property Site Visit
- Certified FHA 203k Renovation Consultant meets with the borrower and contractor (if you have one at this point) at the property
- Explains the renovation process and answers questions
- Walks through the property to evaluate the property condition according to the FHA’s Minimum Housing Standards
- Listens to the borrower’s desired renovations and improvements
- Suggests improvements that are customary to the industry
- Looks for and identifies suggested or mandatory repairs to make the home safe and sound upon project completion
- Discusses any potential risks to a successful renovation based on the condition of the property
- Takes measurements, counts quantities, and collects data on property
- If the home has not been inspected for termites, inspect for an additional fee (highly encouraged)
- If the home has not been inspected, perform a home inspection for an additional fee (highly encouraged)
Detailed Work Write-up, Cost Estimates & Loan Closing Package
The renovation consultant will prepare a concise work write-up document regarding the project’s scope and specifications based on the initial site visit and inputs from the buyer regarding their renovation plans. Provided architectural exhibits along with a detailed cost breakdown for each of the repair tasks are included. The renovation consultant will also prepare a lender package and contractor bid packages that contain everything mentioned within the project scope. Finally, we prepare draw request forms based on the work plan.
Once the detailed work write-up is completed and signed by all, a copy of the completed package with all the required documents is submitted to the lender, contractor and the borrower.
Post Site Visit
- Contacts or follow-up with the contractor to explain the process, answer questions and revise the contractor’s bid
- Researches municipal building permit requirements and fees
- Estimates each repair line item
- Drafts an independent renovation cost estimate
- Reviews provided contractor bids for appropriateness
- Determines if the project is feasible given the condition, required work and loan approval amount
- Prepares contractor bid packages
- Facilitates contractor bidding, if requested for an additional fee
- Coordinates with general contractor to prepare detailed labor, materials and quantity construction estimates within HUD specified cost categories for the loan to close
- Prepares the detailed work write up
- Coordinates signatures for all documents by all parties
- Delivers the lender package and work write up to the loan officer or underwriter, contractor and borrower
- Follows up and resolves any issues directly with the underwriter to ensure the loan closes on time
Choosing a Contractor
The borrower will then invite bids from contractors to complete the work listed in the consultant write-up. Before you proceed with the contractor bid process, make sure your 203k lender agrees to it. Most active 203k lenders may have a pre-screened list of eligible contractors and they may require that the work is done by one of them. If not, they may have a set of requirements for a contractor handling the renovation work. It is highly advisable to work with a contractor who is aware of the 203k guidelines and understand the steps involved in it. Make sure any new, inexperienced contractors you want to work with understand the draw process and the work completion schedule.
Many contractors take issue with no money upfront. Each draw payment has a 10% holdback. The holdback is paid to the contractor at the end of the project to ensure all work is completed properly and no liens have been placed on the property throughout the duration of the project.
All contractors are required to be licensed, insured and in most cases obtained EPA Lead Safe certification. The Lead Safe certification is required where paint on a building older than 1978 is being disturbed.
Borrower’s responsibility Contractor Selection
- The Borrower selects a contractor. Your lender may and will 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 an FHA 203k project, it is important that they are informed early on about the FHA 203k loan program as it applies to contractors.
- The general contractor is required to maintain $1 million in general liability insurance coverage, have 3 references within the last 12 months, show that they are in good standing with their creditors, and provide a detailed bid broken down into labor and materials.
Your 203k lender will schedule a closing that is convenient for you and the seller once a contractor is selected and the loan conditions are satisfied. Funds for the renovation are placed in escrow after all the loan closes. The Certified FHA 203k Renovation Consultant issues the Notice to Proceed to the contractor and at this point the renovation work starts.
Draw Request Inspections
The 1st draw payment is processed once the Certified FHA 203k Renovation Consultant determines that all the necessary permits have been issued from the local authorities. The renovation consultant processes further draw payments as work is completed and the contractor requests payment.
The Certified FHA 203k Renovation Consultant creates a punch list for the contractor containing any unfinished items at the 4th draw request. The 5th and typically the final draw payment is typically held until the final inspection. At this point, the project will be successfully completed with no unfinished tasks. A 203k lien release form that absolves both the borrower and the lender is entered between the buyer and the contractor. The contractor is required to provide a 12 month warranty on the completed work.
- Repair funds are placed in escrow
- Consultant informs contractor of Notice to Proceed
- Remodeling begins with an anticipated completion date of 180 days from the start date but of course earlier completion is always encouraged
- Contractor completes no more than 30 days of work and requests a draw
- 1st Draw – Consultant insures permits were issued.
- Consultant Performs Draw Request Inspections
- Consultant recommends adjustments or approval to the borrower
- Prepares draw request documents and sends for signatures
- 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
The above tasks requires an active role of a Certified FHA 203k Renovation Consultant. Not every project is the same, and requires strong organizational skills, communication and superior construction knowledge. We are here to assist you through the toughest and most demanding addition renovations. Give us a call today (816)565-1991.
Renovation Consultant Fees
The exact fee to be paid depends on the cost of the proposed repair work. The FHA HUD Office determines the consultant general fee schedule. Our actual fees may vary from the amounts published by HUD based on additional and associated tasks. The HUD established fee includes visiting the property and providing all the necessary exhibits along with a complete work write-up.
Contact us at (816)565-1991 for actual fees.
The primary responsibility of the Certified FHA 203k Renovation Consultant is to insure HUD’s minimum property standards are met. The renovation consultant also ensures the smooth completion of the project and that the work is completed properly before payments are issued, the contractor is paid timely and the borrow is satisfied with the process.
If it seems like the work write up is an important document package. It is. In the work write up the Certified FHA 203k Renovation Consultant details the required repairs that will need to be done to your property, any recommendations for work that should be done and any work you want completed.
The work write up will also stipulate if the home is habitable or not, the number of draws that will be allowed and the amount of contingency that will be required. The maximum number of draws is 5 or 6 depending on the lender. If the home is not habitable you will have an option to finance up to 3 mortgage payments in to the repair escrow amount. The number of months is determined by the scope of the work and how quickly the home will become habitable.
There is a contingency fund that is used for unforeseen site conditions. All renovation loans require a contingency fund of 10% – 20% of the base bid amount based on the consultant’s discretion. The scope, property condition and complexity of the work usually dictates the percentage of the contingency. Usually when the power is off, there is foundation work involved or there is any major structural work within the renovation the contingency is usually set at 20%.