• To help the borrower/homebuyer make an informed decision before purchasing the property and provide an idea of ptential rehab costs and FHA requirements

Initial Site Visit/Consultation

• Consultant will perform a thorough examination of the property (it is not a Home Inspection)
• Consultant will perform a Initial Property Assessment (IPA) to determine FHA required repairs, and will also input the buyer’s list of requested additional repair or remodel items
• Consultant determines the estimated cost of the Scope of Work, does not make a decision about which repairs should or should not be made
• The Homebuyer pays a retainer fee, and the exact fee to be paid depends on the cost of the proposed repair work (the HUD stipulated fee amounts)

FHA 203(k) Lender Work Write-up

1. Once the bid specs are complete and a cost projection is calculated by the Consultant, the specs are reviewed by the borrower for corrections, deletions, or additions
2. The Work Write-up will include the borrower’s desired grades, as well as what will be required by FHA and building code compliance
3. The Contractor usused the Scope of Work Contractor Bid package to provide the homebuyer/borrower with a detailed bid that reflects the total cost of improvements, including labor and materials
4. A Scope of Work document is created by the Consultant for contractor’s bid specifications.  This document describes the entire project in clear, unambiguous detail so all contractors bid the same list of required repair and remodel items
5. Consultant will also prepare the lender packages and contractor bid packages
   • Review of Contractor bid (BOR)
   • Review of architectural documents (mold, well, septic, drawings)
   • Review of lender requests
   • Review of revisions to the Specifications of Repairs (SOR) and BOR
   • Submits all required documents and completionn of detailed work write-up to the lender, contractor, and borrower

Homeowner’s Role

• Communicate with your Contractor throughout the Renovation Process until the project is completed
• Any concerns and/or issues during the renovation project needs to be resolved between homeowner and his/her Contractor
• Bill Evans Home Team are not mediators and cannot resolve any disputes between homeowner and contractor during the renovation process
• Homeowner can contact Bill Evans Home Team Front Office to schedule the First Draw Inspection, and thereafter
• CANCELLATIONS – CALL the front office the day before the confirmed appointment and reschedule with the front office and notify the Contractor also

No Money (according to the Lender)

• There are no funds available for up-front start-up costs
• It is highly advisable to work with a contractor who is well aware of the 203(k) guidelines and understand the steps involved in it.  If you are going to be working with a new contractor who has no prior experience, make them understand the Draw process and the work completion schedule as determined by the 203(k) Consultant in the Write-up package.
• Materials cannot be paid for with construction draws until they have been acceptably installed
• Each Draw is subject to a 10% holdback which will be retained from each Draw and released when the repairs are acceptably completed, inspected and a determination has been made that there are no outstanding mechanics liens
• Work stoppages cannot exceed 30 days during the renovation period

Payments at Completion

• The Lender will disburse draws by official check payable to the Borrower and the Contractor
• Only those repairs/remodeling listed in the approved Specification of Repairs are eligible for reimbursement
• Bill Evans Home Team, LLC does not issue payment checks.  All payment questions should be directed to the Borrower’s Lender

Two types of 203k’s

Limited (formally Streamline)

Use of a 203k consultant is optional but may be required by the lender. Discuss with your lender who will provide the guidelines needd for this type of loan.

Standard 203k

Use of a 203k consultant is mandatory for a Standard 203k loan.

How does it work?

Two major phases of the program includes developmental phase to settlement and construction phase to completion.

Developmental Phase

1. Buyer/Borrower works with real estate agent to select a property and secure a ratified contract. (If uncertain of the repair cost, the “Bill Evans Home Team” can assist you in determining the mandatory repair costs. We offer a Pre-off Feasibility Study to evaluate the property and provide repair costs.
2. Schedule on-site meeting and property evaluation. Contact the Bill Evans Home Team to setup a meeting at the property to evaluate condition of the property with one of our consultants.
3. Constultant performs the Initial Property Assessment/Feasibility Analysis. This on-site inspection is not a full home inspection but includes may of the areas normally evaluated during a home inspection. This inspection is designed to identify all HUD mandatory repairs and esimated costs. The “Bill Evans Home Team” renovation consultant is also a licensed home inspector and can perform a combination of home inspection and 203k inspection. Doing both together will save the buyer money on inspections.
4. Consultant develops the specification of repair (SOR) (work write-up) in the HUD approved format. This SOR includes all the renovations and repairs that will be completed within scope of the loan. The consultant will include cost brekdowns for all the designated work. In addition, a contractor bid package or Bid On Reapirs (BOR) is prepared that includes the SOR write-up with no cost estimates.
5. The Consultant is required to rview all required architectural exhibits the project will need. These may include drawings, mold tests, termite inspection, structural entineer report and any other required inspections needed prior to settlement.
6. Buyer/Borrower receives and reviews the SOR and BOR. After review, the Borrower will coordinate with properly licensed contractor(s) to visit the property and BOR. Contractor will complete the required BOR that includes cost of each line item showing both materials and labor cost for each.
7. Buyer/Borrower reviews the contactor proposals and selects the contractor to perform the required work. The final BOR is submitted to the Lender and the Bill Evans Home Team Consultant.
8. 203k Consultant will review the contractor BOR’s and update the draft SOR. The final SOR with other required 203k documents will be sent to the Lender and Buyer/Borrower. Upon receipt of the final SOR the Lender will order an formal appraisal of the property. The appraisal will bebased on the after repaired market value or the properly.
9. Upon final appraisal and underwriting approval the settlement will occur.

Construction Phase

1. After settlements Contractor begins work with 30 days. There are no advance funds or deposits given to the Contractor at this time.
2. Upon completion of designated work defined in the SOR, the contractor can request funds (Draws) to be release. The Contractor and Borrower should meet together and develop the 203k Draw Request forms per HUD guidelines. After agreement for funds to be released, the Bill Evans Home Team should be contacted to schedule a site draw inspection. The signed draw request should be sent to the Consultant prior to the site inspection.
3. A Bill Evans Home Team Consultant will perform the site inspection reviewing the work completed and finish sign off on requested funds. The Consultant will send the signed draw paperwork with accompanying pictures to the Lender for release of funds. The lender will withhold 10% of each draw amount request until the end of the project. This is required by HUD 203k guidelines.
4. Any deviation from the SOR will require a change order. The Contractor will develop the changes which needs to be approved by the Borrower, Consultant and Lender prior to work being done.
5. Upon successful completion of work and final inspections the repair escrow and renovation project will be closed out. Any remaining funds left in the escrow will be put on the principle of the loan.

What does it cost?

HUD sets the fee schedule that 203k Consultant can charge.