Role of a 203(k) Consultant
Step by Step Process
1. 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 $400 retainer fee.
2. Prepare Work Write-Up
Consultant prepares a detailed work write-
up which contains:
Clear, concise project specifications
Construction cost analysis
HUD required draw request forms
Preparation of contractor bid packages
Preparation of lender packages
3. Work Write-Up Delivery
Consultant delivers the work write-up
Consultant fee balance is paid by Borrower.
4. Selection of a
Contractor by the
The Borrower selects a contractor.
Borrowers should be aware that many
lenders may have their own 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.
5. Loan Closes
Repair funds are placed in escrow.
6. Draw Request
1st Draw - Consultant insures permits were issued.
2nd & 3rd Draw - Draw request inspections are performed as renovation work progresses.
4th Draw - A punch list is established.
5th Draw - The project is closed out and warranties and lien releases collected.