Friday, October 3, 2014

Do I Have to Use a 203k Consultant on My Project?

The short answer is No, you don't. However there is allot more to it than that. Since there were no consultants prior to 1994 and the program has been around since 1961, HUD says a 203k consultant isn't an absolute necessity. It is, however, REQUIRED by most lenders to facilitate the process.

Prior to 1994 there were many instances where the FHA 203k closing took 4-6 months, not all but way too many. Most Realtors and home buyers don't want to wait that long. A good consultant can shorten that time-line to 2-3 weeks and sometimes even more. This can allow the lender to close in 21-35 days pretty regularly.

There is a "self help" possibility built into the program but most lenders have redifined that to include licensed contractors who want to buy and fix up their own home. The bookkeeping may be too much for most.

If you have a streamlined k you are "in effect" being the general contractor and hiring the sub contractors for your project. If you have to switch this to a full 203k after you have started the process for some reason there are some lenders that will allow yout to continue being the general contractor and maintain your cost savings. Not typical, if you have this situation you may have to change lenders to achieve your goal. I would be happy to talk to your lender for you if you have this situation and see if we can't maintain your multiple contractor configuration.