Check out page 375:
https://www.hud.gov/sites/docu...
(1) Work Plan
The Mortgagee must obtain a work plan from the Borrower detailing the proposed
repairs or improvements. The Borrower may develop the work plan themselves or
engage an outside party, including a Contractor or a 203(k) Consultant, to assist.
There is no required format for the work plan.
II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
A. Title II Insured Housing Programs Forward Mortgages
8. Programs and Products - 203(k) Rehabilitation Mortgage Insurance Program
Handbook 4000.1 376
Effective Date: 09/14/2015 | Last Revised: 12/30/2016
*Refer to the online version of SF Handbook 4000.1 for specific sections’ effective dates
(2) Written Proposal and Cost Estimates
The Mortgagee must obtain a written proposal and Cost Estimate from a
contractor for each specialized repair or improvement. The Mortgagee must
ensure that the selected contractor meets all jurisdictional licensing and bonding
requirements. The written proposal must indicate Work Items that require permits
and state that repairs are non-structural. The Cost Estimate must state the nature
and type of repair and cost for each Work Item, broken down by labor and
materials.
The Mortgagee must obtain written Cost Estimates for each Work Item, broken
down by labor and materials, to be performed by the Borrower under a self-help
agreement.
(3) Sales Contract
The Mortgagee must obtain a copy of the sales contract and ensure that the sales
contract includes a provision that the Borrower has applied for Section 203(k)
financing, and that the contract is contingent upon mortgage approval and the
Borrower’s acceptance of additional required improvements as determined by the
Mortgagee.
When the Borrower is financing a HUD REO Property, the Mortgagee must
ensure that the first block on Line 4 of the form HUD-9548, Instructions and
Sales Contract is checked, as well as the applicable block for 203(k).
BUT it makes sense to get the 203k consultant FIRST.1
