Real Estate Renovations

Posts Tagged ‘United States Department of Housing and Urban Development’

I’m the Consultant. HUD Consultant.

In Dept of HUD, real estate on April 17, 2012 at 4:20 PM

Soooooooo…… in today’s most recent episode of estate renovating, we had the opportunity to meet the HUD Consultant.

If you remember from my earlier post, part of the process involved with the 203K Renovation loan requires a certified HUD Consultant to visit the property and review not only the scope of work we are interested in doing but also looking at the property to ensure EVERYTHING is Federal Housing Administration (FHA) compliant. Seems like a cake walk. I’ll admit I was a tad bit anxious only because I believe that everyone who has that type of power already has it in their minds that they are going to ding you for the sake of dinging you to make a few extra bucks.  It’s not like you can really argue the point.

Our HUD Consultant was actually very nice, we corresponded by email prior to the visit and he let us know what he would be doing.  We provided him with the (ever evolving) scope of work to give him a picture of what the project looked like. When he arrived we went on a walking tour with me explaining ( in beautiful colors and textures) all of the work to be completed.  He was much more interested in the roof tiles and how big the AC unit would be.

He was very thorough, getting into all the crevices and orifices of the house and I am glad to say we really did well. ( I give my little house a pat on the roof!) There was really only one area that we needed to add into the (already swollen) budget and that had to do with paint and our windows.

Now we are having new window installed throughout but because of the age of our home we will have to have the wood frames capped in vinyl or have every frame scraped and repainted.  NOOOOOOO!!!! I have no idea what the contractor is going to charge for that and unfortunately we are not able to just do the work ourselves outside of the loan, now that it has been noted by the HUD Consultant.

So I am grateful that the damage was not worse, but I will have to do yet more number crunching…

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The Process: HUD 203K Renovation Loan

In Dept of HUD, Financing, real estate on April 16, 2012 at 10:48 PM

We have decided to  use the Department of Housing and Urban Development’s 203K Renovation Loan. In essence we will be refinancing our current mortgage and rolling in the cost of the improvements we will be making into a new mortgage.

The process for this loan thus far has been relatively pain-free. We are working with a fantastic loan officer who is knowledgeable of his industry and has walked us through the process. I highly recommend using a specialist in this area.

Once through the approval process HUD will send out a HUD Certified Consultant who will view the property and the proposed improvements that will be shown in a completed scope of work, insuring that all necessary repairs are made for habitation.

From there it’s on to the appraisal, this is still a mortgage and it must make fiscal sense to lend money for the project, even if you will be remaining in the property. The appraisal must come back able to support the loan amount you will be seeking for improvements.

After all of that it’s on to closing!!

Another point of the 203K loan is the way the loan is structured.  You are working with your HUD Consultant and your Builder. Monies are held by a third-party and the HUD consultant will release funds to your contractor as needed and ensure and inspect the work is done properly and to completion. You won’t find yourself in a situation where someone runs off with your money or doesn’t do or complete work on your project.  Additionally, the contractor will not be able to collect 100% of his fee until EVERYTHING outline in the scope of work is completed satisfactorily. Neat huh?