FHA 203k Minneapolis, Minnesota and for the entire state of MN. Below is info regarding hiring a 203k consultant for a FULL FHA 203k loan. A FULL 203k is needed when loans are:
- Over 35k in renovation costs
- Renovation dealing with Structural remodeling (ie knocking out walls etc.)
- Foundation renovation being needed
The FHA 203k Consultant we recommend working with is Paul Lesieur, 203k consultant. Paul can be reached at 612-788-5584 or Paul@203kloanmn.com.
You need a good 203k rehab consultant!
The key to a good 203k consultant is hiring one who is understanding of how the 203k rehab process works, including what it should cost and how long the process should take.
Extensive building/renovation knowledge and good communication skill are needed.
A consultant should understand that the Realtor, home buyer, lender and the contractor all work for you-----not to mention the FHA 203k consultant as well!
Do I need a consultant to pay the contractor?
After the FHA 203k loan is closed and the rehab funds are put into escrow account. Your contractor will start ordering materials to begin the work. The demolition starts and then the contractor starts doing the repairs according to the written scope of work that was approved by all parties.
The FHA 203(k) FULL program is different in that it requires that the Contractor to provide ALL the funds to begin the project, and the contractor isn’t paid until the Consultant is called for a Draw Request or Change Order invoice. In a STREAMLINE FHA 203k, the contractor is provided 50% of the bid monies at close to begin the project. For the FULL FHA 203k, the lender wants only the top end contractors to be working on the project--hence the need for the contractor to be able to float the starting funds on the project.
To pay the contractor you need the 203k consultant to approve the draw request.
Inspections by the local permitting authority, the City or County, still have to occur as required by the General Building Permit. Typically the FHA 203(k) Consultant is called at the same time to verify that the Permit has been signed and all construction (labor and materials) have been put in place as set forth in the Specification of Repairs. A maximum of 5 Draw Requests can be called in. Typically they occur at 30/60/90% intervals and then the final 10% when the Punch List is substantially completed. The fifth inspection is to insure that the property has been turned over to the Borrower in good condition, and to release the 10% holdback to the Contractor. Obviously, the scope of the project will determine the number of draws needed.
Your FHA 203k Consultant visits the property, makes sure that all FHA minimum standards are being met, then checks to make sure the work is done as specified in the work write up and construction is up to code (IBC Standards). The Consultant should give you peace of mind and is your assurance that everything is being done as it should.
At each Draw Request inspection, the Contractor is required to sign a Lien Waiver for the amount they are given, making sure that all subcontractors and material suppliers have been paid. The lien waver document is turned in with the formal Draw Request, is considered mandatory by the lender, and insures clear title for the property. The check usually arrives within 7 to 10 business days (but some banks take longer so ask your loan officer how long it will take) and is issued in the name of the Borrower and the Contractor.
You, the homeowner, sign the check over to the contractor and the contractor is paid for work done.
Contact us today about getting your FULL FHA 203k started today.
Ben Coulter | NMLS#383046
612.384.7818
612.677.3100 Fax
UptownFinancial.com
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