@Brendan Cronshaw - I found and downloaded the FHA handbook that gives the outlines for the different types of FHA loans.
This is what I found on the subject of selecting contractors-
"Standard 203(k) Establishing Repairs and Improvements
The Mortgagee must select an FHA-approved 203(k) Consultant from the FHA 203(k) Consultant Roster in FHAC. The Mortgagee must not use the services of a Consultant who has demonstrated previous poor performance based on reviews performed by the Mortgagee. The Consultant must inspect the Property and prepare the Work Write-Up and Cost Estimate.
The Work Write-Up refers to the report prepared by a 203(k) Consultant that identifies each Work Item to be performed and the specifications for completion of the repair.
Cost Estimate refers to a breakdown of the cost for each proposed Work Item, prepared by a 203(k) Consultant. Work Item refers to a specific repair or improvement that will be performed.
Exception for Borrowers Doing Own Work For Borrowers performing their own work under a Rehabilitation Self-Help Agreement, the Consultant must identify on the Work Write-Up each Work Item to be performed by the Borrower. The Borrower must not be reimbursed for labor costs.
Standard 203(k) Financeable Repair and Improvement Costs and Fees The following repair and improvement costs and fees may be financed:
costs of construction, repairs and rehabilitation;
architectural/engineering professional fees;
the 203(k) Consultant fee subject to the limits in the 203(k) Consultant Fee Schedule section;
inspection fees performed during the construction period, provided the fees are reasonable and customary for the area;
title update fees;
permits; and
a Feasibility Study, when necessary to determine if the rehabilitation is feasible.
Any costs for Energy Efficient Mortgages and Solar Energy Systems must not be included in financeable repair and improvement costs. For Borrowers performing their own work, the Mortgagee must include the costs for labor and materials for each Work Item to be completed by the Borrower under a Rehabilitation (Self-Help) Loan Agreement. "
If there is anyone that can help clear up the muddy waters a bit - I think we all would benefit from it.
