A 203(k), Consultant’s role is crucial to the success of your project when you take out a loan. Also known as the HUD FHA203(k), loan process.

The 203 K Consultant NJ will guide the borrower throughout the loan process, including closing. After closing the loan, the consultant will keep in touch with the borrower to ensure that all details are covered and all questions are answered. They also conduct draw inspections after the contractor has completed their work.

Although all HUD FHA203(k) processes are different, the process would usually start with a willing buyer/borrower or seller of distressed property that is in dire need of major repairs.

After identifying the property, the buyer would usually conduct initial inspections. This includes a walk-through and personal assessment. This will help determine the property’s size and potential repairs. A contractor may be hired to inspect the property and offer a repair proposal based on their expertise in construction. Buyers may opt to have a licensed home inspector inspect the property. A septic inspection, water testing, including quality and well testing, and inspections for wood-destroying insects, would be important to the buyer. Some lenders might require specific inspections. It’s a good idea to inquire about this when choosing lenders. The buyer should then start to consider feasibility. If the buyer believes the project is feasible, they will want to hire a 203(k), Consultant. As there is often a deadline, quick action is required.

HUD approved consultant rosters can be found on the HUD website at: https://entp.hud.gov/idapp/html/f17cnsltdata.cfm.

It is crucial that buyers keep feasibility at the forefront of their minds throughout the entire process. This includes before the 203(k), Consultants are hired. This is vital as many properties will not be possible. In other words, the risk of losing the property’s marketability or investing in it to increase its marketability will outweigh the benefits. There will be fees involved each time the buyer moves on to the next step.

Once the 230(k-certified consultant is located, the actual HUD FHA203(k), process begins. Some consultants may wish to inspect the property and make notes and take photos. This is typically a separate charge.

Bald Eagle inspection Services provides this first step. It includes a detailed scope of work and photos. This consultation can be used to create a bid format for contractors or provide pricing. This is an innovative and valuable step that can help you save time and money.

If the buyer decides to proceed with the process, they will sign a Consultant Agreement. The buyer will also have to pay the HUD Consultant Fee. The buyer/borrower will then be the client of the Consultant.

Below is the U.S. DEPARTMENT of HOUSING and URBAN DEVELOPMENT approved HUD fee schedule. The handbook may contain additional fees. You can find a copy of the handbook on the HUD website www.hud.gov or by searching for Handbook 400.1.

WORK WRITE-UP FEES: $400 for repairs below $7,500, $500 between $7,501 & $15,000, $700 between $30,001 & $50,000, $700 between $30,001 – $50,000, $700 between $30,001 – $50,000, $800 between $50,001 ­ $75,000 repairs between $50,001 _ $75,000 repairs between $50,001 ­ $75,000 repairs between $55,001 $75,000 repairs between $50,001 — $75,000 repairs between $75,001 и $100,000 repairs, $1,000 for repairs, $100,000 a repair between $100,000 and $100,000 repairs, $900 between $100,000 and $100,000 repairs,000 repairs,001 to $100,000 repairs, and $100,000 repairs

FEE FOR A FEASIBILITY STUDY: The Consultant may charge $100 to prepare a Feasibility Study if the Borrower or Mortgagee requests it.

DRAW INSPECTION FEES: The Consultant may charge an inspection fee for each draw request. However, it must not exceed $350.

The consultant would use the information gathered at the initial inspection to provide the Client with a HUD203(k) Work Writeup and Feasibility Study report. This is usually required by banks to obtain a loan. To be the official scope of work for the property, a well-written HUD 203 (k) Work Writing is required. The Feasibility Study contains the construction cost analysis as well as contingencies. These documents together provide valuable information for the client, lender, and contractors. The HUD203(k) Work Writeup and Feasibility Study can also contain desired work that the borrower may wish to include.

Contractor selection can begin once the HUD203(k) Work Writeup and Feasibility Study report has been obtained. The borrower usually handles this process, but consultants can help for an additional fee. A borrower should also be prepared to start this process early so that they have bids from contractors. The qualifications of lenders should be known by borrowers. Some lenders might disqualify contractors. They may also have lists of approved contractors that you can use. This question should be asked by borrowers when choosing a lender.

After the contractor selection process has been completed, the loan will be approved and the construction costs placed in escrow to be used by the borrowers for repairs.

The construction and repair process begins. As construction progresses, the Consultant will perform draw request inspections. Two draw inspections are usually required for a project. The first draw will confirm that required building permits have been issued. The final draw will confirm that the construction punch list was completed and that lien releases were obtained. If the project has only two draws, the punch list is completed in either the second or third draw request. The Consultant also ensures that the HUD minimum properties standards are adhered to during the draw request process.

A successful HUD FHA203(k) process will look like the following:

  • The buyer chooses the property.
  • Buyer conducts their initial inspection of the property.
  • Buyers have the choice of whether to do Licensed Home Inspections, septic inspections, water testing, quality tests and wood destroying insects inspections. Ask your lender about the requirements.
  • The buyer chooses a 230(k), Consultant.
  • A consultation inspection is performed by the Consultant.
  • The consultant provides HUD203(k), Work Write-Up, and Feasibility Study.
  • Selection of contractors is a process.
  • Close of the loan is completed.
  • The construction and repair process begins.
  • The Consultant will conduct draw request inspections as construction progresses.
  • The consultant would conduct a punch list inspection of the borrower.
  • Final completion and closeout of the project.
  • Final draw inspection.

Bald Eagle Inspection Service, LLC can help you with all your inspection needs. Bald Eagle Inspection Services, LLC, is your best choice for all inspection and testing needs. With the versatility to perform structural, wood destroying insect, septic, mold assessments/inspections, radon testing, indoor air quality testing, and water testing including water quality and well yield. Bald Eagle Inspection Services, LLC offers a powerful solution for all your home-buying needs in one place.