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