203(k) Training Outline
Overview of Class Materials
Ø 203(k) Seminar Handbook: A complete seminar manual that definitively outlines the 203(k) program. Includes items needed to start performing inspections including Minimum Property Standards, Mortgagee Letter 95-40 and more.
Ø House Problem/ Solution Index: Contains over 2000 common problems contained in home and how to disclose these problems to you client. Over 350 pages.
Ø HUD 203(k) Videos: An actual class videotaped, complete with a actual case study of a home in Eastern Pennsylvania renovated using 203(k) funds.
Ø Rehab a Home With HUD’s 203(k): HUD Brochure on the 203(k) program. Briefly outlines the 203(k)program in readily understandable plain English.
Ø Rehab Consultants Field Training Guide: A manual describing the inspection process and how performing a feasibility study and work write coincide with the home inspection process.
Ø Computer Disk. Learning Mode & Test Mode: Over 600 questions regarding the 203(k) program, inspecting, and other subjects covered in class. 350 of these questions are sent back to ISB for grading and final certificate.
Department of Housing and Urban Development Overview
Ø 203(k) Program has been around for over 20 years. Program was streamlined considerably two years ago. Loan times went from over 3 months to closing to in most cases under 30 days for closing. Program now resembles the 203(b) program with an expanded home inspection. Streamlining opened up position of independent consultants. Loan production has soared as a result of the streamlining.
|
Year |
Number of Loans |
|
1994 |
3500 |
|
1995 |
8500 |
|
01/1996-04/1996 |
15,000 |
Source: Pat Porter - Crossland Mortgage
Ø HUD Primary Goals. To renovate existing housing stock in all areas throughout out the United States.
Ø Eligible Properties: With some renovation and acquisition exceptions most 1-4 unit buildings over one year old are 203(k) qualified.
Ø How The Program Can Be Used: Limitations, Guidelines, Repairs allow, Repairs not allowed.
Ø HUD Loan Limits. How to check local loan limits for you HUD office. Discussion of minimum amount of repairs.
Improvements
Ø Required Improvement: All units must meet all applicable local codes and HUD’s Minimum Property Standards. These items must be written up before any eligible repairs can be made.
Ø Eligible Improvements: Repairs that HUD will allow for. There is a $5,000 Minimum; some eligible improvements include New built-in Appliances and Walkway or Driveway if a health/safety item.
Ø Hazard Improvements: Correction of Lead Based Peeling Paint in buildings constructed prior to 1978.
Ø Additional Improvements allowed over $5,000 Minimum include much everything except for luxury items outlined below.
Ø Improvements not allowed: List of improvements not allowed to be performed under the 203(k) program.
Ø Commercial Spaces; Discussion on the eligibility of the 203(k) program on commercial and mixed use properties.
Maximum Mortgage Amounts
Ø Maximum Mortgage Calculations: How they are performed.
Ø Cost Of Rehabilitation: How it is determined, contingency, inspection fees, etc.
Ø Exemption of Market Value: What is it, how it is used.
Ø Solar Energy Increase: what this program is and how it is used.
Ø Energy Efficient Mortgage Program: Allows the cost of energy efficient items to be included in the mortgage with out increasing the borrowers mortgage eligibility.
Ø Title 1 Loan: Another rehabilitation loan program that is an alternative to the 203(k) loan product.
Application Process
Who You Work For And When
Ø Your job as the eyes and ears of HUD and the Bank. Your job to report any detrimental conditions that are here during construction.
Ø Borrower: You are to give guidance during the feasibility study and the work write-up package.
Ø Must explain process to Realtor; Bank; Consultant; Appraiser; Contractor; Code Inspector.
Ø How to instill realistic expectations. Compromise Vs Cost
Ø Allotting Time Required For Each Project.
Ø How to instill quality control at the draw inspection stage. How to properly release monies to the contractor.
Ø How to show the originator that the costs contained in the work-write up is realistic.
Ø Recommended turn around time for each report is with one to two weeks.
Ø HUD: Correcting All Required Deficiencies According To Guidelines
Ø Remodel an Unusable Property Into Livable Conditions
Ø Quality Control at Draws - Release Money To Contractor
Your Job As Plan Reviewer
Ø Plan Reviewers Certification (Text Tab 3)
Your Job As Consultant
Ø Written Agreement With Client - Fees
Ø Feasibility Study
Ø Write UP
Ø Architectural Exhibits
Ø Definitions
Ø Consultants Role
Ø 35 HUD Divisions
Ø Form HUD 9746-A
Ø Rehab Checklist
Ø Field Training Guide
Your Job as Draw Inspector
Ø Form HUD 9746-A (Text Tab 1)
Working With Banks (Appraisers)
Ø Rehab Team Concept (Text - Rehab. Team Tab)
Working With Contractors
Ø Client as Contractor (Text Tab 2)
Ø Materials Only, No Labor
Marketing
Ø -Banks & Mortgage Companies
Ø -Real Estate Agents
Ø -Contractors That Do 203(k) Work
THE SUPPORT MATERIALS TO MATCH THE NEED
For all students attending the 203(k) program
FHA 203(k) Seminar Workbook
Rehabilitation Consultants Guide
House Problem/Solution Guide
400 Question Learning/Certification Disk
Specification Writers Guide
Quick Estimators Guide
Feasibility Study Guide
Work Write-Up Take Off-Guide
Life Cycle Cost Guide