203k loan - do I need a consultant?

Question

I am thinking of getting a 203k loan to buy and fix up a house that I will live in.  I have seen ads for "203k consultants" who will walk you through the process.  Some are also general contractors who will do the rehab.

I already have a contractor that I would like to work with for the fix-up.  If I can find a mortgage broker who is experienced with 203k loans, do I really need to hire a separate consultant?

Ashley Huff · Answer

Encountered your post with some searching through the website. I'm currently in this position. I live in Texas if that needs to be stated at all. My lender is telling me that consultant will be assigned to the loan so its not necessary to hire my own consultant. She will provide contact information for the consultant, but all of my questions should be relayed to her and she will take care of everything.

I guess my question is - do I need to hire my own consultant even though one will already be provided through my lender?

I know this is an older post, but I'm hoping someone will offer me some lessons from experience.

Thanks.

I guess my question is - do I need to hire my own consultant even though one will already be provided through my lender?

I know this is an older post, but I'm hoping someone will offer me some lessons from experience.

Thanks.

Steven Gesis · Answer

Hi Mike-

Checkout: (3) Secrets Everyone Needs to know about using a 203k loan for more information on the 203k loan, loan process and how to build the right team for success.

Good luck to you!

Gary Smith · Answer

Mike,

You might consider these reasons why a consultant is a good idea to help with your K rehab:

1. A third party will be reviewing the work in the field for the lender and for FHA. The consultant will also represent you, the buyer, at the time your bid is being prepared.

2. Health and safety issues, fire protection, and a host of other conditions should be evaluated at the time you remodel or rehab, especially if you're purchasing.

3. The consultant can help you secure the right mixture of repairs-to-value. Not all repair items or choices will increase the value of the subject property.

4. FHA's program has a number of nuances to navigate. Your consultant can help provide guidance through all the Rehab phases.

Learn more about the K and find a consultant in a handy zip code search here: http://www.my203k.info

Gary Smith

Paul Welden · Answer

Mike -

On the Standard/Full 203k, HUD/FHA requires the use of a 203k Consultant 99% of the time but the lenders require the use of a 203k Consultant 100% of the time.

On the Streamline 203k, a 203k Consultant is not required by HUD/FHA and most lenders do not require one. But there are some lenders that do require the use of a 203k Consultant on all 203k's. You will benefit greatly by using a 203k Consultant on the Streamline 203k, because s/he will tell you what items are required to be repaired according to FHA standards. Without this information, your contractor will only be taking their best guess as to what items are FHA requirements. Also, the 203k Consultant can help you to make certain the contractor pricing and proposal is as accurate and complete as possible, includes all necessary items and can help to be another set of eyes and ears for your project.

You can only benefit by using a 203k Consultant and stand the chance of things not going well by not using one. Please seriously consider hiring a 203k Consultant. It is also recommended for you to use a contractor for the renovations that fully understands the intricacies of the 203k (HUD/FHA time limes, paperwork, processes, compensation/draw guidelines, repair categories, etc.), such as a Certified 203k Contractor.

Wayne Brooks · Answer

You can not do your own work.  The contractor has to be approved by Your Lender.  No actual legitimate "certified 203k contractor".

Anna R. · Answer

Can I as an owner, act as my own General Contractor? Or do all 203K  need to be done by certified 203K Contractor?

Brian Morgan · Answer

I used a 203K loan to purchase my first property. As long as you and the GC are on the same page with the draws and punch list, I see no reason why you would need a consultant.

The process was quite simple for me.

203k loan - do I need a consultant?

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