203k Renovation frequently Asked Questions

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What can I do to make sure we complete settlement on time?

Have your paperwork in order, select your contractor, and establish a budget. Your goal should be to have your work write up and contractor selection completed within 14 days of meeting your consultant. Remember your appraisal cannot even be ordered until this is completed.

How many contractors can I use on the same project?

HUD allows up to 3 contractors on the same project, but you should be discouraged from doing so as it can often create complications, finger pointing, and confusion. If you must use more than 1 contractor, coordinate that with your consultant carefully.

Can I be my own contractor?

Technically, yes you can be your own contractor. However, your lender will want you to prove that you not only have the capability of doing your own work, but you will also have to show that you have enough time to complete the project in a timely manner. Therefore, planning to work on it nights and weekends simply won’t do. A licensed and insured contractor gives you some recourse in event of a problem and will likely result in a quicker, more professionally completed project.

Can I choose my own materials?

Yes, you can choose your own materials and are encouraged to do so and be as specific as possible. Flooring, light fixtures, cabinets, doors—all should be specified in the work write up.

How do I pay my contractor?

Your contractor gets no money up front and will only be paid based on work that is actually completed after your 203k consultant performs an inspection. You will be presented a draw request report prepared by your consultant and signed by you, your contractor, and your consultant so that your consultant can process the draw request with your lender. It generally takes 3-7 days for the check to arrive to you, the owner.

What can I do to expedite payment to my contractor?

Once the inspection is completed, your consultant will likely email you a draw request form for signature. Try to get that document signed by you and your contractor and sent back to the consultant as soon as possible.

How long should it take to get a contractor bid?

We can provide you 3 or 4 contractors to contact or you can use any contractor you like. You should make sure that all contractors have a copy of a bid sheet prepared by the consultant so that all contractors are bidding on the same work. You should begin to contact various contractors after you meet your consultant at the project. A good consultant will help you find a good fit with a contractor and help you negotiate a favorable agreement.

When is the appraisal ordered?

The appraisal cannot be ordered until the 203k write up is completed and signed by all parties. Remember, you should plan to get this completed within 14 days of meeting your consultant at the property. That will assure a timely settlement.

When do I call my consultant?

You should contact a 203k consultant as soon as you’re even considering buying a foreclosure or any other distressed property. This will give you some objective input to the construction and renovation process. If you don’t already have a lender, a realtor, or a contractor, the 203k consultant can often refer you to reputable people in order for you to make a better decision.

Can I get a repair estimate before I make an offer to buy?

Yes you can. However, beware of the “free estimate”. Most contractors do not understand FHA requirements for a 203k and you may end up with either a low ball estimate because the contractor really wants your business or the contractor may test you by giving you a high price. Either way, contacting a 203k consultant first to get a 203k feasibility study will cost you $250 but save you a lot of headaches.