Frequently Asked Questions
What are the requirements of being a 203(k) Consultant?
The requirements for a HUD consultant are outlined in Mortgagee Letter 95-40. In order to attend one of our classes and be listed with the HUD National office you must comply with ML 95-40. Here is an excerpt from that letter outlining the qualifications required:
HUD requires at least three years experience as a remodeling contractor, general contractor or home inspector in order to qualify as a 203(k) consultant. The consultant must be able to perform home inspections, prepare the necessary architectural exhibits, and be able to complete the draw inspections on the property during the construction phase of the project. A state licensed architect or engineer may also be accepted.
How long has the 203(k) Program been in existence?
The FHA 203(k) program has been around for about 18 years and has seen very positive growth from the private sector for the past 5 years. This program is such as success because it is applicable to almost all types of housing, not just HUD homes.
What are the average fees charges by 203(k) Consultants?
While HUD sets some maximum and minimum charges, the HUD Suggested Guidelines are outline below. In addition to the fees outline you are allowed to charge $100.00 for a Feasibility Study, and up to $75.00 per draw request.
|
Amount of Rehab |
Consultants Fees |
|
$5,001- 7,500 |
$400.00 |
|
$7,501-15,000 |
$500.00 |
|
$15,001-30,000 |
$600.00 |
|
$30,001-50,000 |
$700.00 |
|
$50,001-75,000 |
$800.00 |
|
$75,001-100,000 |
$900.00 |
|
$100,001-HUD Limit |
$1,000.00 |
Is there software available for Consultants to use?
Yes. ISB offers HUD approved software that is complete with a variety of specifications and estimates all customizable for your area. 203(k)Mate for Consultants will prove to be invaluable in helping you to prepare HUD paperwork. Feel free to call ISB to get your free demonstration copy or visit us at http://www.isbinc.com/software/
What is the Basic Process for Completing a 203(k) Loan?
The basic Steps for Completing a 203(k) loan are outlined as follows:
-
- Homebuyer locates property
- Feasibility Study is performed
- Sales Contract is executed
- Client Selects a 203(k) Approved Lender
- Homeowner hires Consultant to perform Work Write-up and Cost Estimate
- Lender Request HUD Case Number
- Appraisal is performed on Property to establish before and after appraised values
- Loan Closes
- Construction Begins
- Draw Requests are processed
How Long is the Class?
The seminar is a one-day course, with many supplementary materials included. Courses are held at locations nationwide. Please refer to class schedule for classes nearest to you. Registration begins at 8:00 AM, the classes starting at 9:00AM and running through 5:00 PM. There will be a one-hour break for lunch.