Is there an Approved List of Contractors

The Contractor Approval and Requirement for the 203K Renovation Loan Program is State Licensed, have Workman’s Compensation Insurance, Liability Insurance with Limits to $1,000,000.00 and have a reserve to start work until the first draw no advance is provided, provide three references of similar projects. There is no approved list manage by HUD or FHA as insurance for any transaction. The borrower is to select to Contractor based on the above requirements.

203(k) Architectural Exhibits
The improvements must comply with HUD’s Minimum Property Standards (24 CFR 200.926d and/or HUD Handbook 4905.1) and all local codes and ordinances. The homebuyer may decide to employ an architect or a consultant to prepare the proposal. The homebuyer must provide the lender with the appropriate architectural exhibits that clearly show the scope of work to be accomplished. The following list of exhibits are recommended, but may be modified by the local HUD Field Office as required.
A. A Plot Plan of the Site is required only if a new addition is being made to the existing structure. Show the location of the structure(s), walks, drives, streets, and other relevant details. Include finished grade elevations at the property corners and building corners. Show the required flood elevation.
B. Proposed Interior Plan of the Dwelling. Show where structural or planning changes are contemplated, including an addition to the dwelling. (An existing plan is no longer required.)
C. Work Write-up and Cost Estimate. Any format may be used for these documents, however, quantity and the cost of each item must be shown. Also include a complete description of the work for each item (where necessary). The Rehabilitation Checklist in Appendix 1 of Handbook 4240.4 REV-2 should be used to ensure all work items are considered. Transfer the costs to the Draw Request (form HUD-9746-A).
Cost estimates must include labor and materials sufficient to complete the work by a contractor selected by the Borrower. Borrowers doing their own work cannot eliminate the cost estimate for labor, because if they cannot complete the work there must be sufficient money in the escrow account to get a subcontractor to do the work. The Work Write-up does not need to reflect the color or specific model numbers of appliances, bathroom fixtures, carpeting, etc., unless they are nonstandard units.
The HUD 203K Consultant who prepares the work write-up and cost estimate (or an architect, engineering or home inspection service) needs to inspect the property to assure:
there are no rodents, dry rot, termites and other infestation
there are no defects that will affect the health and safety of the occupants the adequacy of the existing structural, heating, plumbing, electrical and roofing systems the upgrading of thermal protection (where necessary).

Fred Sweezer Sr.
Certified HUD 203K Consultant S0712
FHA Compliance Inspector T477
Certified Home Inspector


What is determined in a 203(K) feasibility analysis report?

What is determined in a 203(K) feasibility analysis report?

A number of important and essential details regarding a property in need of repair work is provided in a 203k consultant’s feasibility report. The scope and the extent of the rehabilitation is clearly documented in the report along with the cost of repairs. If a property to be purchased is need of fixing up, then it is extremely prudent to have the report in hand prior to submitting a formal offer to purchase. An appraiser will also need to be consulted to see if the repairs justify the after completion value. In cases where the value doesn’t get a substantial bump despite the repairs, it would be better to consider other properties than the one currently being considered by the buyer. The fee amount to perform an initial assessment is quite reasonable and the amounts are established according to the HUD 203k consultant fee schedule.

For Home Buyers

For home buyers looking for financing through a 203k mortgage loan program, a feasibility analysis serves a specific purpose; it helps them make a quick decision regarding the cost involved in renovating a single-family or multi-family residential property to meet the HUD minimum property standards. Know this info can give clarity to the buyer about the offer price. A HUD 203k consultant can conduct a thorough feasibility analysis upon visiting the property for a fee of about $350.
A feasibility analysis report can be used as the basis to know the exact amount needed for necessary repairs to be performed prior to submitting a purchase offer to the seller. A seller may also be more willing to negotiate and adjust their sales price according to the findings from a 203k consultant feasibility report. Most sellers will not be willing to pay for any cosmetic upgrades beyond the amount needed to satisfy the minimum property standards set by HUD.
Knowing about the tasks and the scope of the needed work in renovating a residential property can help a buyer proactively seek competitive bids from contractors to complete the repair work. A consultant who performed the initial analysis may also be willing to assist the buyer in evaluating the merit of the offers submitted by renovation contractors.
A buyer’s agent can provide the information regarding the selling price of home comparable to the one the buyer is interested in considering for purchase. This market price can be adjusted for the cost of the repair work stipulated in the feasibility report to arrive at a reasonable purchase offer amount.
For Sellers
Sellers should also consider ordering a feasibility study from a reputed 203k consultant to determine the most amount they can sell their property for. Being well aware of upgrades and the essential work needed on a property to increase its “after improved” value can become invaluable to the seller, especially when they are approached by buyers looking to seek financing through the FHA 203k mortgage loan program. The guidelines for 203K program allow the purchase price to be as high as 110% of the ARV(After Repair Value).

For Realtors

Realtors who specialize in rehab properties can also benefit a great deal with the help of a proper feasibility analysis report before marketing their listing. A buyer will be more willing to consider purchasing a rehab property when they are well aware of the needed repairs right at the beginning. The report will also carry more weight if it were to come from a home inspector on the HUD roster than from others. An agent can also tie up with a lender specializing in 203k financing to streamline all the necessary aspects involved in residential rehab property purchase for the owner-occupant buyers interested in buying them.

For REO Agents

Bank REO listing agents have found a great deal of success marketing properties when armed with a thorough feasibility report from a FHA 203k consultant. In addition to the benefits outlined above for the various entities involved in the purchase and sale of a rehab property, there are several other compelling sensible reasons to consider a feasibility analysis. The need for another home inspection that may cost an additional $400 can be easily avoided. If a buyer who may be considering 203k funding is found, the consultant can then do a full work write-up to account for any additional upgrades and changes sought by the buyer.
Don’t Go with Free
Quite often, one may consider just calling up a contractor and getting a free estimate regarding the repair work. This may be a reasonable option if the contractor is known to be trustworthy and has worked with you in the past. If that doesn’t happen to be case, do not opt for this. You will usually get what you pay for and since you are getting it for free, it may not be worth all that much.
As the contractors are motivated to earn your business, they may initially present a proposal with a lower cost estimate than the real amount necessary to finish the work. The real cost and addition repair work may be revealed to you after you have already come to an agreement and the contractor has already begun work. This kind of behavior is widely prevalent and the only way to avoid falling into this common trap is to seek an independent and honest feasibility analysis report from a professional HUD approved 203k consultant in your area.

Los Angeles, CA

Fred Sweezer Sr.
Certified Home Inspector
Certified HUD 203K Consultant S0712
FHA Compliance Inspector T477



Bulging floors, cracked walls, and doors that won’t close are all signs of foundation distress. Sixty percent of all homes built on expansive soils suffer from foundation distress. The problem occurs when only part of the foundation heaves or settles, causing cracks and other damage.
This differential movement is largely caused by differences in soil moisture. Loss or gain of soil moisture can cause serious shrinkage or swelling. See what causes foundations and slabs to sink.
If the frame of a house does not begin to distort until after three or more years of satisfactory performance, it is doubtful that the distortion is caused by full-depth foundation settlement, which is always evidenced by matching cracks. Cracks occur at each side of a portion of the foundation wall that is undergoing downward movement caused by soil bearing failure.
Settlement cracks are nearly always vertical, and they should not be confused with cracks that occur when a wall is subjected to lateral movement from soil pressure.

Exterior Warning Signs:
Wall Rotation
Separation around garage door, windows and/or walls
Cracked bricks
Broken and/or cracked foundation
Displaced Moldings
Interior Warning Signs

Misaligned Doors and Windows
Cracked sheetrock
Cracks in Floor
backfill problems cracking

Installing Motion Sensor Lights For Your Security

There are quite a few methods you can work on increasing your home's security as a first time homeowner. One of the simplest ways however includes a very easy solution that will help keep would-be burglars away from it. You can always hire a professional electrician to get it done, but there is really no need as long as you've had at least minimal experience with electrical work. You should consider one thing however before you proceed, you should keep a few things in mind, such as the fact that this will mean you can install the lights in locations where you already have lights.Secuity  Light how to install

Fred Sweezer Sr
Certified Home Inspector
Certified HUD 203K Consultant S0712
FHA Compliance Inspector T477

How hard is the 203k renovation loan program for Realtors

Here are the comments I have heard over the last few months:

1. The 203K program is hard to get done.

2. The 203K program is easy as pie.

3. Loans take forever with a 203K and we keep missing deadlines.

4. Loans can close in 30 days with the 203K.

5. I love the 203K.

6. I hate the 203K.

What do you make of that? Experience is very important to avoid the confusion. How easy or hard is the 203K?

Recently renovated kitchen

That depends on the team you end up with:

1. Your buyer gets prequalified from and experienced 203K mortgage broker.

2. Your buyer signs a purchase agreement.

3. The FHA inspector or 203K consultant is called and does an inspection.

4. Buyer calls and experienced 203K contractor.

5. Contractor helps your buyer figure out what everything costs.

6. Contractor sends the estimate and all the related forms to lender.

7. Lender processes mortgage.

8. Appraiser blows up the deal

9. Loan closes.

Okay, item number 8 was meant to make this light hearted. The property does have to appraise out though – just like any other sale.

Loans can close in 30 days using the 203K if the lender and the contractor are experienced. When looking for a experienced loan officer, ask them how many 203K loans they have done. No experience is likely to mean more headaches.

When looking for a good 203K contractor ask these questions.

1) How many 203K projects have you done?

2) What is your process for dealing with the paperwork?

3) How long does it take to get the paperwork done?

My first exposure to the 203K program has an interesting story. I was called in at the last minute because a contractor whom the buyer had a relationship with bailed on the project at the last minute because he wasn’t able to wait 45 days for the last half of his payment. The loan blew up – but the lesson was important.

Use experienced people.

The 203k program works!

Fred Sweezer Sr

Certified Home Inspector
Certified HUD 203K Consultant S0712
FHA Compliance Inspector T477

Foundation Cripple Wall

A short wall that rests on the foundation and supports the floor and exterior walls of a structure. Should your home be equipped with such walls it’s a very good idea to have them seismically braced especially if you live in one of California’s high earthquake zones. During a lateral type seismic event an unbraced cripple wall can have a hinge effect and the back and forth shaking can result of structural collapse.

Bracing a foundation cripple wall is not rocket science, but is basic engineering and we normally recommend any planned structural modifications should be first looked at and approved by a state licensed structural engineer.

Cripple Wall Bracing using the 203K Renovation Loan Program

A cripple wall receives all the earthquake force of the building.

Fred Sweezer Sr
Certified Home Inspector
Certified 203K HUD Consultant S0712
FHA Compliance Inspector T477

The U.S. Fire Administration offers smoke alarm tips

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The U.S. Fire Administration offers smoke alarm tips.

1. One of the best ways to protect yourself and your family is to have a working smoke alarm that can sound fast for both a fire that has flames, and a smoky fire that has fumes without flames. It is called a Dual Sensor Smoke Alarm.
2. Place a smoke alarm on the ceiling of every level of your home and inside and outside all bedrooms. Children and older people can sleep though the loud sound of a smoke alarm. Make sure your escape plan includes someone that can help children and others wake up immediately to escape from the home.
3. If you keep your bedroom doors closed, place a smoke alarm on the ceiling of each bedroom.
4. Check smoke alarms monthly by pressing the test button.
5. Never take smoke alarm batteries out to put into other items like games or remote controls.
6. Teach children what the smoke alarm sounds like and what to do when they hear the alarm sound.
7. If there is a fire, leave the home right away by crawling low under the smoke and never go back inside.
8. If smoke from cooking makes the alarm sound, press the “hush” button, if your alarm has one. You can also turn on the kitchen fan, open a window or wave a towel near the alarm until it stops making the sound. Never take the battery out of the alarm.
9. Most alarms need a new battery at least once a year. Some smoke alarms have batteries that last for up to 10 years. If your smoke alarm is more than 10 years old, replace it with a new alarm and battery.
10. If you rent, talk to your landlord about placing a working smoke alarm in your home. You still need to buy a new battery at least once a year for the alarm.

Fred Sweezer Sr.
Certified Home Inspector HttP://
FHA Approved Compliance Inspector
FHA 203K Consultant

203k Feasibility Study In Long Beach California (Video)

Fred Sweezer Sr. is a HUD certified 203K Renovation Consultant. Providing 203K Reports to lenders and consumers to establish both the HUD minimum property standards as well as allowable elective items for appraisal and underwriting purposes.
We also perform a feasibility study to help consumers determine both if a 203K project is feasible and practical and help the consumer determine what has to be done minimally as well as identify and focus in various elective construction items to help determine the overall costs of both the minimum requirements and their elective choices.

Fred Sweezer Sr.

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A Gift From the Government

FHA 203k Loan
If you’re looking at a fixer-upper, the Federal Housing Administration rehab loan may be the mortgage for you.
Are you interested in buying a fixer-upper, but don’t have the cash to remodel it? Or maybe you have saved money for remodeling and you’ve found a house you love, but your lender won’t allow you to buy it because the house isn’t considered habitable without toilets.

There are always properties on the market that weren’t maintained by cash-strapped former owners, were treated poorly by renters or were deliberately trashed by formers owners before they lost their home to foreclosure. Shouldn’t there be a way for someone like you to fix up these neighborhood eyesores and bring them back to life?

A Gift From the Government
There is, and it’s brought to you by the federal government. The Federal Housing Administration’s rehab loan product, the The FHA 203(k) Loan was designed for individuals who want to rehabilitate or repair a damaged home so they can live in it as their primary residence. These loans are endorsed by the government to encourage lenders to offer what would otherwise be considered a risky loan product. Because of the risk and expense involved, rehab projects are normally handled by professional real estate investors who can buy properties with cash and therefore don’t need any bank to approve the property’s condition.
According to the FHA, “All persons who can make the monthly mortgage payments are eligible to apply” for a 203(k) loan. To find a lender in your area who is experienced with FHA 203(k) mortgages, use the search tool at check the box for 203(k).

You might be surprised by the variety of home repairs and improvements that can be financed with the 203(k) loan. These include, but are not limited to:
Room additions
Site grading and drainage
Bathroom remodeling
Kitchen remodeling, including appliances
Finishing an attic or basement
Structural alterations and repairs
Adding or decreasing the number of units in a dwelling (e.g., single family to duplex)
New siding
Second story addition
Elimination of lead-based paint problems
Heating, ventilation and air conditioning systems (HVAC)
Energy conservation
Disabled access
The FHA does not allow “luxury items” such as tennis courts, swimming pools, hot tubs and barbecue pits to be financed with a 203(k) loan, but some items that you might think of as luxuries, such as whirlpool bathtubs, are actually allowed. Talk to your lender about the specific improvements you want to make to see what you can finance.

Fred Sweezer Sr. is a 203K Consultant

Structuring An Offer With A 203k Loan

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OK, I’ve heard many reasons why a Realtor or REO lender won’t accept a 203k loan contract offer.  How do we combat this?  We have a qualified homebuyer but their choice of financing is an issue.  The main roadblocks are that the loan takes too long to fund, and that Realtors have heard nightmares about past attempted 203k loan fundings.

These are both valid issues.  As far as taking too long, if put together correctly from the start, an additional 7 business days should not be enough to kill a deal.  Heresay from another fellow Realtor should not keep you from accepting a 203k contract offer either.  Have we heard nightmares about BofA, Wells Fargo, Chase and Citi and how they are on their normal conventional loans?  Absolutely.  The 203k loan is no different.  Draw upon your own experiences on this loan on whether or not it’s a viable loan.  Give it a chance.

Making an offer to buy a home using a 203k loan, whether it’s the 203k Streamline loan, or the 203k Standard loan, needs to be done differently than an offer to purchase using a conventional loan.

Here’s a few tips on how to present an offer using the 203k Standard loan.  1.  Submit a copy of an inspection report or a feasibility report prepared by a certified HUD 203k  Consultant.  2.  Include a detailed scope of work and repair estimate prepared by your 203k loan HUD Consultant.  3.  Get an Automated Underwriting Approval for an FHA 203k loan.   4.  Submit an offer with comps to support your offer.

Submit the above four items listed above along with your purchase contract, which should also specify you are using an FHA 203k loan for financing.  This should demonstrate that you have done your homework and due diligence, and that there is no guessing on your part on how this loan works.

In regards to item one above, submitting an inspection report/feasibility report, in my opinion is key.  Getting this done up front takes away the guess work when buying an as-is property.  Could you submit your offer with an inspection contingency and not pay for the inspection upfront?  Sure.  But if it’s evident that the property needs work, usually your main competition is going to be investors buying cash.  Your offer should be better than a low ball cash offer, so spending the extra upfront money on the upfront inspection/feasibility report via the HUD Consultant would be worthwhile.

It’s also possible that if you lose out on your offer, the HUD Consultant may not charge you for your next home inspection if you lost out on your previous offer.  There may be room for negotiation there, and the  HUD Consultant for their intial home inspection/ feasibility report, charges about the same for their fee as a normal home inspector and they are highly qualified and understand the 203k loan nuances and know if the property will fit the 203k loan specifications which in general are pretty broad.  A normal home inspector can not do this, they look for different things than the HUD Consultant even though their jobs are similar.

Using people familiar with the 203k loan process is vital and that goes for contractors as well, but I’ll save that commentary for my next post.  This isn’t the only way to submit a 2o3k loan contract offer, but it’s a start in the right direction to show both the lender and listing Realtor you mean business and understand the process and hopefully they do some research on their own to understand this is a viable loan option that is only growing in popularity and needs to be accepted by all involved in the real estate process.

Call Fred Sweezer Sr.