Saturday, December 28, 2013

Become Part Of A 203k Team

I've always looked at the 203k as a team sport, even when I first got involved with it. When we put out our audio tapes in 1998 we even discussed it.

You are only as good as your 'team' in any case. If your consultant can't write a good report, the lender won't have much to work with and on the other hand if the lender can't get the loan closed it doesn't matter how good the 203k consultant writes the report.

This is true of the rest of the team as well. Your teams each should have a Lender that can close an FHA loan, even a 203b quickly.

Our trained 203k consultants will provide 100% of the 203k portion so the lenders can take our MMW and use it to help them fill out their form... it is their responsibility but we try to make it easier for them.

If we all do our part of the project and then pass the baton to the next team member this frees us up to get the next project started.

Example: A 203k loan may begin anywhere by any one of the team members. We quite often get calls from our websites or the HUD website from a borrower... we immediately asses the situation and more than likely we'll send them to a lender to get that process started.

They may already have a property, that is okay, we still need to get that lender take on the borrower to be sure they are credit worthy. Not wanting to waste time or the borrower's money we need to verify they have the ability to get the 203k loan going.

If they don't have a property then we suggest a realtor or agent to help them find one in a neighborhood of their choosing.

We may actually start consulting to determine what type property they might want. There are several possibilities in this realm.

Once they locate a property suitable for their needs we set up a 203k consultation and inspect the property to create the 203k bid specifications.

Once those 203k specs are complete the borrower should look them over to be sure everything looks like they want it. Then they go to the lender.

The lender takes the 203k specs and provides that information to the appraiser and the appraisal is completed with an 'after improved' value. Once we reach this point the loan should close within a week or so typically.

Once the loan closes the borrower needs to get that information to the contractor so they can get that project in their schedule.

This is an important step as this is the only way the contractor has of learning the loan has closed.

They have up to 30 days to get their first draw inspection but in most cases they will have someone start long before that. In many cases they will start within a few days of your closing the loan.

We look forward to helping you build your 203k business.

Know that this is much more than just 203k, you will be trained in all renovation loan products that you can also consult on.

You will have access to our marketing materials and power point presentations to increase your "Referral Partner" Base too.

We have referral partners that provide a considerable amount of work for us in the FHA 203k loan program.

We'll show you a way to finance 80% of the pool repairs or even add a swimming pool to a home that doesn't have one.

To place an order go to 
Mike Young, 203k Consultant
Cell phone 1.704.451.1599

We now have offices in

Charlotte, NC
Columbia, SC
Charleston, SC
Denver, CO
Detroit, MI
New York, NY
Los Angeles, CA
Santa Barbara, CA
Austin, TX
Dallas, TX
And we are growing our business!

Wednesday, December 25, 2013

Sunday, December 22, 2013

I'm A Contractor, Why Should I Learn About The FHA 203k Program?

If you have all the work you need already then maybe you don’t need to know about the FHA 203k loan program but there are allot of you out there that have been buying my eBook “Contractors and the 203k” indicating that many of you are becoming aware of this program. Why is that? Simply put “more business” than you can handle.

When I take on a new contractor into our “203k Team” we ask one thing of them “Stop us before you get too much work from this program”. The last thing any of us want is for you to get a bad reputation for not being able to get these projects to completion in a timely manner and we have had some that don’t know when enough is enough until we start getting bad service. So… please just pull back a little when the time comes and then open the spigot again when it appears you are about 3-4 weeks from needing more work.

There are two types of FHA 203k loans. I will describe the differences below and YOU need to know them and choose the right one for your circumstances:

1) Full or Original 203k (started in 1961)

This program uses a 203k Consultant to create a bid specification. That specification is sent to you, the contractor for your bid. It is typically a blind bid situation. In some cases the contractor has already put in a bid for the work they think will be required but in many cases they aren’t aware of the HUD Guidelines so they may miss a few things but overall this seems to cut down on the time it takes to close the loan so it isn’t all bad. If the borrower has several clients come out and bid the project prior to seeing us to create the “scope of work” it can be a mess. As much as the client tries to have them bid the same project if you don’t write it down each contractor will have their impression of what they thought you said and each bid will be slightly different and the client will not have a clear bid that they can use.

I prefer to be the first one on the job to create the specification of repairs. I also will bid the job (never will do the work, just bid it) so the client has an expectation and we all know this project is still viable.

There is no “up front money” for this program. The contractor must be well healed and have credit or money or both to get the project started. Since each draw must be no more than 30 days from the prior one the contractor should have enough money to carry his/her business, materials and labor for that period of time plus whatever they need to run the rest of their business. This program allows for interim draws and you can get partial payments for anything that is partially complete but only for completed work. Some lenders will follow the guideline and let you get money for cabinets and finished flooring up having it delivered and stored on site. Some lenders will advance 50% of the window and cabinet materials money only when they are custom sizes and the check may be made out directly to the cabinet maker or window manufacturer.

This has been and can be a difficult situation for a small contractor or a contractor growing too fast. They need, heck, we all need “cash flow” which is the life blood of every business.

2) Streamlined “k” (started in 2005)

This program was intended to make the program easier to use for the majority of the lighter renovation projects. The significant thing with this one is that it cannot have any “structural” component. It is intended for smaller projects and though the maximum construction costs are limited to $35,000 per the Guideline in reality it is only $30,000-34,200. If you come up with Streamlined “k” loans where the work is $35,000 and your lender only does the Streamlined “k” you will be disappointed most of the time. The $35,000 must include the costs and fees associated with it. The $30,000 figure is due to the requirement of many lenders to maintain a 10% contingency reserved which takes a $30,000 right to $33,000 immediately.

The big thing here is that there is “up front” money for the contractor of 35-50% of the construction cost. The project must be completed in no more than 60 days, and there is only one final draw at the completion. No other interim draws.

Mike Young, 203k Team Leader Mike ready for your 203k order

With offices coast to coast and HQ now at 
1351 Oliver Road, Fairfield, CA 94534 

Thursday, December 19, 2013

Fast Track Your 203k Loan

Fast Track Your Loan!

Want to get your loan to close faster? Of course you do. It is easy if you put together all of your financial data and have it ready to hand to your lender upon application. You can even get your 1003 application form filled out in advance. Don't wait till the last minute, find a house, then start gathering this info... it may take you a week to get it together. The loan application period starts after you turn this info in to your lender.

Click here for an application kit

Monday, December 16, 2013

Our Latest Software For 203k Consultants & Contractors

Award winning 203k Report Writing Software

This version is loaded with new features, more forms, & has our proprietary system for recapturing the Streamlined "k" business for our 203k consultant clients and trainees.

Want the best of all worlds - get all of our marketing strategies, training aids, and we'll help you market YOUR business in YOUR town by being one of our business partners.

There are lots of areas still open but we do restrict the number of Franchises available in a marketing area. Be better than the rest by joining the company that prides itself on "Providing more than our clients expect"

Fore more information, please visit

Friday, December 13, 2013

What Can I do If My Appraisal Came In Too Low?

By Mike Young 
Home Inspector with, covering California & most other states S0289 

You hear stories now and again that indicate the apprased value of a home was lower than expected. That happens now and then but you must remember that the appraiser is only giving you their "opinion" of value and that if you disagree, you can suggest other comps you feel they should have used or have another appraisal done if you feel the appraiser didn't know the neighborhood. The appraiser will obligated to respond to your comps and tell you why they didn't use them.

You can even use the same lender's stable of appraisers. You don't necessarily need to change lenders to get that second opinion though you may want to. Using in AMC isn't always the right answer but they will have more than one appraiser to choose from for sure.

USPAP or Uniform Standards of Appraisal Practice calls for an appraiser to know the area they are appraising, and understand and apply their appraisal principles. Two appraisers given the same assignment and using the same comparables may come in 3-5% different. If it is more than that then you have to read the reports to see what each thought was more important and why they gave more weight to one comp over another and then decide if another appraisal is needed.

 I did an appraisal review years ago in Fairfield CA, about six blocks from where I lived. The subject property had a pool and the appraiser had given most wight to a home within a block that was at the entry to that micro neighborhood so each car in the neighorhood had to pass this house on the way home while the subject was the second house from the end of the block on a dead end street. Most weight was given to this first comparable sale. There was an adjustment for lack of a swimming pool.

Being the first house at the entry to the micro neighborhood it backed to a busy street, sided to a busy street. When I was doing the review I merely got out of my car, walked to the fence on the sidewalk and could see it had a swimming pool. I was able to use the exact same comps the appraiser used, correct their adjustments for the false assumptions and come up with a more accurate assessment which was about $20,000 less than the appraised value as I recall. As you make adjustments on the grid and you adjust properly the value should present itself. The amazing thing is it will be supported across the board on all of the comps if your adjustments are correct.

If you miss fixing some health or safety items like straps on the water heater or CO or smoke detectors your appraiser may have to revisit the site for a 442 inspection to see these items have been corrected at an additional fee and you have to let them in which costs YOU time and money. Best to have those fixed prior to the first visit.

If the appraisal is only 5-10% low you can change loan programs to the FHA 203k and gain 10% advantage as long as those little issues are included in the report the appraiser has to see them "as repaired".. Having had about 39 appraisers on my staff over the years it was an issue from time to time to prove but not a regular occurrence. FHA 203k loans, both the streamlined k which has no lower limit or the Standard 203k can gain you that 10% advantage on the appraised value.

Tuesday, December 10, 2013

Mike Young: What’s My Line? | FHA 203k Consultant

Photo of Mike Young 
Who is Mike Young and what does he do?

Mike Young is a FHA 203k Consultant. 


What does an FHA 203k Consultant do?

  • Meets with clients and “consults” explaining the program
  • Reviews the contracts and procedures so there are no problems during the course of construction
  • Makes the FHA 203k compliance inspection to determine what it will take to bring the structure up to the MPS (Minimum Property Standards). This includes mandatory repairs such as ceiling insulation, caulking, weatherization, grading, etc.
  • Recommends contractors and lenders if they client does not already have them selected
What is the difference between an FHA Consultant and a Home Inspector?
A  home inspector and a 203k consultant can be, and quite often are, the same person. There is really no difference in the home inspection and the consultant’s 203k compliance inspection.

The inspections can be the same inspection. The home inspector quite often creates a “deficiency report” that can be the basis of a 203k report as well.

A typical home inspection might take 3-4 hours and a typical 203k compliance inspection might take 1-2 hours. During that time the home inspector will find deficiencies and suggest further inspections by the appropriate trades persons  and rarely is allowed by state licensing to “price the work”.

On the other hand the consultant does just that, they determine the issue, determine the repair, create a “scope of work” or “scope of renovation” and provides typical costs to repair those items. This is in direct violation of most state licensing “standards of practice” for home inspectors thus the difference between a consultant and a home inspector.

Mike Young can help any buyer in any state, in any city or town.  Mike is licensed by HUD to be an FHA 203 Consultant in all states.

Do FHA 203k Consultants charge a fee?  

The answer is, Yes. Nationally a typical fee for a 203k consultation is between $600 and $700, plus mileage. That isn’t very much for the responsibility assumed. The fee can range from $400 to $1000, plus mileage, for the consultation, but on larger projects additional fees may be incurred. Of course, one would need to contact Mike Young directly and get a fee quote specific to their project.  Clearly, one size does not fill. 

Are there any pitfalls or downsides to FHA 203k loans? 
As with anything in life, even with the best laid plans, things may not go according to plan. If you are having issues with a 203k loan anywhere in the USA contact for some direction and resolution to your issues. The best course of action is to first hire a consultant to ensure the project does go smoothly.

The Mike Young Team represents a group of FHA 203k and Fannie Mae HomeStyle Renovation consultants specializing in renovation loans nationally. No job is too big or too small for Mike and his team.  They recently helped a person in KS who couldn’t find a consultant due to state laws being so restrictive.  They were able to help the person's lender get the loan closed with little delay.

Another person called from CT asking if they could move a historic type home from a lot in VA to a new location in CT. The home was to be placed on a barge and taken to the new waterfront lot in CT.

The 203k program is amazing. Open your mind to the possibilities, or contact The Mike Young Team and they will open it for you.
Mike Young: What’s My Line?  |  FHA 203k Consultant  by Kathleen Daniels, San Jose Homes for Sale - San Jose Short Sale Agent - 408-972-1822

Article Source

Saturday, December 7, 2013

What Happens If We Can't Get Our Project Completed Within the Time Frame Set by the Consultant?

You may need an extension of time to complete the project.

Each construction project has an estimated date of completion set by the consultant or the lender and based on the amount of construction. Variables exist that include the current schedule of the contractor at the time of the closing. If the contractor is notified the loan closed and they can start working asap, does't mean they have to drop everything and begin your project.

1) What really happens is that the contractor is notified of the closing,

2) The contractor checks their schedule and decides that they have a project completing in a week or two and that crew will be sent to the new project at that time.

3) Materials procurement then takes place, the contractor starts gathering the items they will need to complete you project.

All this is happening in the background and the borrower doesn't see very much happening and might be getting anxiety about their project. This shouldn't happen as they have been told what is happening behind the scenes.

Once the project begins construction the contractor is under contract to maintain a crew on the job each day thereafter to insure a speedy conclusion to the project. At no time should the contractor cease work on the project for more than a week. There must be a draw inspection for work completed each thirty days from the close of escrow.

If we look at this logically the first draw is typically is smaller than the future draws as there is less than thirty days of work. If the project is was originally set up to be completed in 4 months and we get to the 3.5 mark you will need to create and execute an extension request. The extension request should include the following:

A) Reason for the delay

B) Time line with a list of items not yet complete and an estimate of when they think each line item may be completed. This time line should be on the contractor's letterhead and signed by both the contractor and borrower.

C) New estimated completion date

If your project was originally set up for 6 months you could get up to five months additionally in this manner.

Wednesday, December 4, 2013

Instant Equity: 203K Loans

Watch the report from Action News' Nydia Han to learn more about the 203k Loan.

Sunday, December 1, 2013

Where Do I Get Help With My 203k Problem Contractor?

As smooth as most 203k projects go I hate to write this post. There is about one in a hundred that become what we refer to as "the 203k from hell" because no one seem to get along.

We had one years ago that three days before the project was to be finished... just three day and we are done... the contractor brought his foul mouthed wife to the project to show her what he had done. Holy cow, from that moment it went down hill fast. Up till then everything was going very smooth.

It turns out her mouth was a "gutter mouth" and she started using the wrong terms to describe his work and it offended the owner's wife who was living in the trailer just outside when she heard F this and F that describing her new home. It was all good just bad choice of words and to a religious person it was about to blow sky high. The owner asked her to leave NOW and that she didn't appreciate the language being used in her home. The contractor's wife being from the gutter didn't take kindly and finally the owner kicked them both off the property. The contractor was fired and not allowed to complete the small amount of work left, ever.

We took another month to find an acceptable contractor to complete the project but who would have guessed that could even happen? Not me. There was no resolution, they weren't going to be allowed back into the home for any reason. Up till then the project had gone very well.

Who knows what that "last straw" might be?

What happens when there is $30,000 in work completed for the first draw and...? 

...and none of the work done was listed on the scope of work? YIKES! This luckily hasn't happened to me but it did happened to a friend of mine in NJ and twice in three weeks. My question to him the first time is how was he going to pay it out? He answered correctly... "I can't pay for any of the work that was done as it isn't' on my list of repairs" - that is exactly right.

When it happened the second time, I had to question his consulting procedure. It seems to be flawed. You need to be very clear on staying with the "scope of work" as outlined in the bid specs because that is what the appraisal was based on and it MUST BE COMPLETED, it isn't an OPTION.

The house is much nicer than our scope of work laid out...

How do you handle that? I did have this happen on one of my projects and I was shocked to see the home was much more than anticipated. The borrower didn't want a draw, the bank called for it to see if anything was progressing. That is their option and obligation under the HUD Guideline. When I arrived it was so much more house. I couldn't believe my eyes. No permit on site, just did the second lender mandated draw and there is still no permit on site. PERMITS MUST BE POSTED AT THE SITE FOR AN INSPECTOR TO SEE ANY TIME THEY COME BY. This is also no an option. The lender was going to call and see if there were permits taken out. I haven't heard yet.

203k 911 is our solution to your problem 203k project

We have completed so many 203k projects that we have seen most everything that could happen, happen. We dealt with it and resolved it. There was some times where I stepped in and mediated for other consultants live and in person... to mutual benefit of all concerned. It actually helps us all to resolve issues amicably. The lender, the borrower, the contractor, all benefit from these services so we now have a place to go to help get these issues aired and resolved in the least costly manner. It is 203k911 and it works all over the country.

-Mike Young, 203k Team Leader 

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668. We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. 

To learn more about the FHA 203k loan program go to To contact us for a consultation please go to and "order a consultation".