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

  package to:

• Borrower

• Lender

• Contractor

  Consultant fee balance is paid by Borrower.

  4. Selection of a

  Contractor by the

  Borrower

  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.
  

• Remodeling begins.

  6. Draw Request   

  Inspections

• 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.