The first big hurdle when executing a 203K loan...

[Account Closed]

Peeps...I need to get bids for general contractors over to the 203K consultant as quickly as possible because there can be a lot of back and forth that goes on before the bid can be accepted and all this needs to happen before the closing.  I have already sent cold calls to as many contractors as I can find asking them about their comfort with the 203K process and working with a 203K consultant and I am hearing back from some...what other tips can you give for expediting the process of choosing the GC?  (I'm looking in the Madison, WI area btw if you know anyone)

[Aaron Poling]

The contractor portion is the most difficult part of a 203k loan. I have been the Realtor for 203k loans, and have been the contractor for one 203k loan also. The hard part is getting contractors to want to work within the fha guidelines, to get the work. It is hard enough to find a good contractor to do a regular job, even without the guidelines. The smaller contractors are typically more reasonably priced, but don't like getting qualified and working in the guidelines. The larger contractors will typically be responsive, and don't mind the paperwork or qualifications, but typically very expensive and could kill your project budget. It is a very difficult thing to work with. 

You just need to make a lot of phone calls, and track down as many contractors as possible. The consultant should be able to assist in that. In my area, the consultants will find the contractors for you, but that may not be the case in all areas. You may be able to speak with all the 203k lenders, and local Realtors that have worked them and find out contractors that they have used and are already used to the process. 

Good Luck! Aaron