203(k)
Consulting
Our
HUD/FHA Approved 203(k) Consultant can
support you with reaching your goals, if you're
considering a home in Metro Atlanta that is
in need of repairs or rehabilitation.
A 203(k) Consultant
is like a project manager who works closely
with you to coordinate and complete the many
steps involved throughout the process. Your
consultant's primary job is to provide the
borrower and their lenders and contractors
with documentation such as project
specifications, scope of work, cost
estimates, etc. with an aim towards getting
the borrower to fulfill the lender's
requirements and gain 203(k) financing.
The following outlines the
steps to closing on a 203(k) Loan.
Feasibility
Inspection
The first step in the process is an initial
site visit when your consultant will perform
a Feasibility Inspection (also called a
Feasibility Study or Analysis). This entails
a thorough evaluation of whether the project
meets the HUD Minimum Property Standards. If
the consultant determines that the project
is feasible, the buyer may enter into a
contract to retain the consultant to
prepare a Work Write-Up.
Work Write-Up
Based on the initial site visit and
client input regarding their
rehabilitation goals, the 203(k) Consultant
will prepare clear and concise documentation
regarding the project's scope and
specifications. This will include
architectural exhibits; detailed cost
breakdown of needed repairs; draw request
forms; contractor application and bid forms; and etc.
The 203k
consultant will then put together Work
Write-Up packages
containing all the pre-mentioned items
and
submit copies to the lender, borrower and
the chosen contractor(s). The borrower will
then await the lender's loan decision.
Loan Closing
Upon satisfying all the lenders 203(k)
financing
requirements, the loan will close. The
lender will then put the necessary
funds into escrow and the selected
contractor(s) will start working on the
home.
The work of the
203(k) Consultant has now been
successfully completed and the contract ends. Due to the
consultant's familiarity with the project,
the client may further retain them to
handle future
draw inspections.
Draw
Inspections
Prior to draws (payments to contractors), a
draw inspection must be conducted to ensure
that all work has been completed to an
appropriate and acceptable level.
•
1st Draw - Consultant insures
permits were issued.
• 2nd and 3rd Draw - Draw
inspections are performed as work
progresses.
• 4th Draw - A punch list
of any unfinished items is established.
• 5th Draw - The project is
closed out and warranties and lien releases
collected.
At this point, the entire 203(k)
rehabilitation project has been successfully
completed.
