# ATTENTION EVERYONE: 203k Remodeling Loans



## rbsremodeling (Nov 12, 2007)

Everyone

Bodger ask me about some information on Friday about 203k remodeling program

It is a FHA rehab loan program that I use to participate in about 6-8 years ago. 



EVERYONE NEEDS TO LOOK INTO THIS

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

*Please ask any questions you may have and I will help. Anyone that has done this before please give your feed back.*

It is not just for GC either some of the jobs go directly to my subs

Anyone with questions or needs an estimate can contact me and I will explain it to them.

http://www.rbsremodeling.com


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## Bodger (Oct 23, 2008)

Thanks Rory! I got the info, I'm all over this. I'll keep everyone posted on the progress on my end. 
I hope anyone else that gets involved in this shares their experiences.

Any port in a storm....:thumbsup:


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## SCCTrim (Dec 25, 2008)

Thanks for this information...and good luck with your upcoming estimates Rory


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## Mud Master (Feb 26, 2007)

so, is this something for contractors to convince HO's to do? Something for a GC to sign up for and use? Or is it a program to assist in rehabbing?

I have no particular interest in it as I am all commercial, however I have a real good friend who is residential rehab/remodel and is slow on work at the time..and if it is something that could benefit him I would love to pass it along.


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## rbsremodeling (Nov 12, 2007)

Mud Master said:


> so,* is this something for contractors to convince HO's to do*? Something for a GC to sign up for and use? Or is it a program to assist in rehabbing?
> 
> I have no particular interest in it as I am all commercial, however I have a real good friend who is residential rehab/remodel and is slow on work at the time..and if it is something that could benefit him I would love to pass it along.



Yes and NO.

If you know some one who needs repairs or can't qualify for traditional lending this is an option for them

It is a program offered by FHA. It is simply a low cost remodeling loan. It is usually used when purchasing a home. *The money is used to do repairs needed to make the home habitable*. 

It is not for high end renovations. It can also be used for a home that you already own and for Commercial repairs, (apartements, sfh rentals etc.

It will pay for a new roof, new kitchen, new bathroom, electrical upgrade or repairs , plumbing upgrade or repairs upgrade etc.


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## Mud Master (Feb 26, 2007)

Thanks RBS!! 

You made it very easy to understand, as I would have probably had to read the website 3x in understand what it was saying (I had a house fire Friday night, so I am just a lil' tired tonight from dealing with the insurance company and etc.)

But thanks very much.


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## rbsremodeling (Nov 12, 2007)

Mud Master said:


> Thanks RBS!!
> 
> You made it very easy to understand, as I would have probably had to read the website 3x in understand what it was saying (I had a house fire Friday night, so I am just a lil' tired tonight from dealing with the insurance company and etc.)
> 
> But thanks very much.


Was it a major fire?? Please do not let the insurance company fawk you. I am dealing with one now for one of my wifey's friends. They really tried to screw her on the estimate.


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## HomerJ (Jan 23, 2009)

rbsremodeling said:


> Yes and NO.
> 
> If you know some one who needs repairs or can't qualify for traditional lending this is an option for them
> 
> ...


Thanks for sharing the information. This looks very interesting given the number of foreclosed homes on the market here. 

Where do you see most referrals coming from on this? Mortgage lenders? Real estate agents?


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## rbsremodeling (Nov 12, 2007)

HomerJ said:


> Thanks for sharing the information. This looks very interesting given the number of foreclosed homes on the market here.
> 
> Where do you see most referrals coming from on this? Mortgage lenders? Real estate agents?


Real estate agents, advertise it on your site. Get the word out that you do 203k loans. 

A lot of contractors don't do them. There is more paper work than usual and if your a hack you will not get your money. 

They check the work and make sure it is done correctly. When I did them it was the same 3-4 contractors doing the work. Good guys that did good work.


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## Bodger (Oct 23, 2008)

HomerJ said:


> Thanks for sharing the information. This looks very interesting given the number of foreclosed homes on the market here.
> 
> Where do you see most referrals coming from on this? Mortgage lenders? Real estate agents?


 Mine came from a loan officer at a bank.


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## Jdove (Apr 2, 2008)

I'm working on one now, up to $35,000 towards Home Improvements. I get my referrals trough loan officers and Real Estate Agents. The houses are usually quite a mess, but you can make good money if the customer gets approved.

FHA guidelines for Residential loans are strict, your credit doesn't have to be that good(580 min.) but you must go Full Documentation(Proving your income through W-2's or Tax Returns, showing proof of Assets, and Verification of Employment). My personal experience about 50% usually end up falling out.


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## Brock (Dec 16, 2007)

Have one of these right now. Buyer asked for a grocery list of items for $35,000 cap. I wrote it up and Fidelity kicked it back out and told me I had to pull out some items and rewrite it for 33k. The bank wants that 2k for unforseen items that may come up. The customer has verbally accepted my estimate and I am currently awaiting a call back from the bank for a closing date. I'll answer any questions about my experiences (although limited to date) with it if interested.

P.S. Customer found me through a google search for remodeling contractors.


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## rbsremodeling (Nov 12, 2007)

Typically the require a 20% contingency fund. 

This of course can vary based on the work being done.


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## Brock (Dec 16, 2007)

One other note.

The paperwork called for a bond but when I called the bank they said that they aren't going to require that. I think the bond on that would be around 3% or about 1k I've heard. I dont carry bond ins. and have never had a customer ask for it.


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## rbsremodeling (Nov 12, 2007)

Brock said:


> One other note.
> 
> The paperwork called for a bond but when I called the bank they said that they aren't going to require that. I think the bond on that would be around 3% or about 1k I've heard. I dont carry bond ins. and have never had a customer ask for it.


Never seen the Bond requirement before. What kind of bond?


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## Mud Master (Feb 26, 2007)

rbsremodeling said:


> Was it a major fire?? Please do not let the insurance company fawk you. I am dealing with one now for one of my wifey's friends. They really tried to screw her on the estimate.


 
Yes and no. My chimney caught fire. My g/f and I were downstairs and my one year old son was asleep upstairs, round 7pm. We heard banging at our door so I went to see who it was and it was my neighbor saying "you know your house is on fire?!" I was like "oh ****!!". so my g/f called the fire department, I got our son out of his crib and gave him to her, she took him down the street so he would not be out in the cold.

My neighbor started getting the on fire coals out of the fireplace and I took a look outside real quick. I live on the water and my chimney is on the water side (front of the house). The flames were shooting over the roof to the back of the house hitting my garage and our car/trucks. Once my family was out of the house I got the hose out from under the house and connected it to the other one I have on the other side and went up the the second story deck, which is ouside our bedroom & my neighbor threw the hose up to me. After some scurrying around I got the gun on it and started spraying, and LUCKILY by the time the FD got here I had it pretty much under control. Though I had to go to the hospital cause of the frostbite(RB, if you remember, Friday night was cold and windy in our area) I got cause in a hurry I did not screw the gun on tight and it was spraying out the connection and gave me a steady spray on my hands and down my shirt & pants into my shoes.

So after ALL that, I called my flu guy and he came out Saturday morning to clean it & install a new cap. Which was my fault I should have had it cleaned in the fall but I really didn't have the money & I always put cleaner in the fireplace and have never had a issue in 23 years. Though the kreosote build up is what caused it. I went up on the roof with him to look & tear out what was burnt. When I got up there & looked my shingles has begun to buckle and he said it was good that I continued to spray it because had I not it would have only been a matter of a couple minutes til' it got into my attic (tho the FD did find a couple hot spots in there but were miniscule), and than my house would have went.

However during the fire the flu had warped and now needs to be replaced. When I built my house I enclosed the chimney/flu with T-111 & Durock at the top by the cap. That now also has to be demolished so they can take out & reinstall the flu, which means I will need to rebuild it, along with some of the deck since I have both decks connected & cut very tight @ the chimney. Something I had planned to do the past two summers but never had the time(I may put something new on it, I just don't know what, however I am definetly putting the durock back at the top).

So I have to meet with the insurance company tommorow between 11am-2pm so they can investigate it and give the go head to have it re-done.

Sorry for the long post.


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## Al Taper (Jul 10, 2007)

Hey Mud...
Sorry to hear about your fire. Glad to hear your all okay.And assume you can stay in your house? What a close call.


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## Bodger (Oct 23, 2008)

Yeah Mud, close one. Good luck with the insurance and keep us posted.

Sounds like you having the cajones to turn the hose on it yourself probably saved a lot more damage from happening. :thumbsup:


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## CA Contractor (Nov 29, 2007)

Thanks RBS for the info - haven't had a chance to read thru it yet. So I'm assuming contractors must get approved by FHA first, is this a lengthy process? Also how are they with payments? We're small so can't carry too long.


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## SmithBuilt (Jan 25, 2007)

Your a good man RB. Thanks for the info.


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## Tugboat (Mar 27, 2011)

Brock said:


> Have one of these right now. Buyer asked for a grocery list of items for $35,000 cap. I wrote it up and Fidelity kicked it back out and told me I had to pull out some items and rewrite it for 33k. The bank wants that 2k for unforseen items that may come up. The customer has verbally accepted my estimate and I am currently awaiting a call back from the bank for a closing date. I'll answer any questions about my experiences (although limited to date) with it if interested.
> 
> P.S. Customer found me through a google search for remodeling contractors.


Hi I am in the process of looking a 203k loan what are the construction requirements I have to meet? Is there some where I can look them up


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## tinner666 (Nov 3, 2004)

Tugboat said:


> Hi I am in the process of looking a 203k loan what are the construction requirements I have to meet? Is there some where I can look them up


Go back to the first post and follow the links.


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## Vision Custom (Jan 13, 2009)

How many are doing these jobs right now? Are they still in demand?

I am meeting with a lady on Thursday to discuss getting set up to start, and she is saying she has a pretty steady stream of work she can send me.


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## mmconllc (Mar 18, 2011)

Vision Custom said:


> How many are doing these jobs right now? Are they still in demand?
> 
> I am meeting with a lady on Thursday to discuss getting set up to start, and she is saying she has a pretty steady stream of work she can send me.


I will be starting one of these jobs soon. 
I am a little concerned about the process with the bank and the HUD inspector because I have never done one of these.
I have also heard from another perspective client trying to go through this program and she is very frustrated with the process.The previous clients above also relayed this sentiment.


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## ED_Painting (Oct 6, 2009)

*203K documentation requirements.*

I'm about to sign one of these contracts, I am surprised and skeptical with the information they are requesting. has any of you had the same experience?
see attached


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## Fordhipo (Jul 29, 2006)

ED_Painting said:


> I'm about to sign one of these contracts, I am surprised and skeptical with the information they are requesting. has any of you had the same experience?
> see attached


 I just finished one for a client. They went with 5th Third bank and the app was similar to that of M&T's. They used it to get me vetted in with the bank. 

5th Third did call my references and talked to them about 5 min each. Made sure we were on budget, finished on time, and that the liked the job we did. So you might want to let your references know they might get a phone call. I let my former clients know this so they were prepared for an interview. 

Be aware that you will be bank rolling this job. My job was $20,000 and they stated they pay 50% deposit on signing and 50% on completion of their inspection. But they really mean they will pay 50% of materials on signing. So I covered the other 50% of materials and all the labor. 

This job was for a friend so I didn't mind the extra hassles and, being a small priced job, the extra time frame for payment.


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## EAM (Jul 1, 2012)

*Help on an Estimate*

We have been successful with 203K streamlines.
I’ve met with Real Estate Agent and/or Lender – never the homeowner first. Out of three jobs – I was awarded 2. I didn’t actually meet the home owner until after closing.
My question is as follows: The consultant contacted me and sent me their Feasibility study of the work they want completed. With their budgeted amount - $89,000. I’m assuming the home owner has hired them. 
They are asking me to bid the job – and break it down by line item by line item. Of course he wants the price on Monday of this week. 
From everything I’ve read – I’m doing the consultants work – they have already submitted this somewhere.
My thought is – to give a price that I can stand by –for a total amount. If I’m awarded the job then I will be happy to break it out for the closing document.
I thought the steps should be – meet with the client / consultant – walk the property – bring in my subs – provide a bid – if awarded provide the detail. If the consultant has already completed the work write up – aren’t they just looking for a contractor that can meet their price points?
Am I missing something.


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## world llc (Dec 9, 2008)

don't break down your price

on another note... a few bank are stopping 203's or atleast holding off for a few months for some reason


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## fathersonfab (Apr 27, 2007)

I have done about a dozen or so 203k projects. It's a great niche to be in. Very little competition, and of you understand the program you can be awarded the job based on your knowledge rather than lowest price. 
My business is nearly all 203k projects recently. 

I am also working with a national company that works with asset managers to liquidate their properties using the 203k loan program. I need contractors in every state who are willing to do 203k projects so we can refer you the business and put you in contact with the realtors and loan officers. Please message me for more details.


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## I Mester (Aug 21, 2011)

I have a job starting up with one of these in about a month or so. they were a pain with all the info they needed, but other then that. their major breakdown was the payment schedule. you have to follow the milestones. and they send the inspector out. and will have a check cut to you within 10 days after that. 
they want all the info on the contractor because they want to be sure you can carry the job. and not disappear while waiting for the next check to come in. they didnt give me any crap about prices or total breakdowns at all.


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## ohiohomedoctor (Dec 26, 2010)

We do a few 203ks a year. Not a bad gig when the actual clients are decent. The problem is that the ho has to sign off before the bank releases your final money which means they have you by the you knows. It has been interesting a couple of times but thank god for my bullet proof contracts. Never enter into a 203k agreement without a legal binding agreement.


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## EAM (Jul 1, 2012)

We have completed about 8 of them this year. I make sure everything is in writing and work with the home owner and mortgage person to ensure that when I'm ready for an inspection / draw they are notified in advance. In addition, when I get a request for a change order and I hear "if the loan is not going to cover it I will pay you direct" I do two things, 1. I don't modify / change / add until I know who is going to pay and have all the approved signature. 2. If the home owner is paying I get paid per my standard payout schedule. A lot of paperwork but so far I've had a good success rate.


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