# 203k hell



## Roberts Ren (Sep 13, 2009)

*You need to call the mor. Company*

Okay been there done that, you WILL HAVE a final inspection buy lender and IF the scope of work is not done then there is NO final payment. Even if the money was used for "other" items you will lose final payment. The roof leak should not be a problem, there should be a % above your estimates for "unforseens". Now you "CAN" make changes BUT the bottom dollar does not change you have to do change orders and they have to be signed by both partys and sent to lender and put on file. Good luck we have finish two and let me tell you HELLLLLL no never again I will go to Wal Mart and get a job first hahahahaah


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## WarnerConstInc. (Jan 30, 2008)

203k work sounds like a huge PIA. I like customers that have their own money in their checking account.


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## mikec (Jan 2, 2007)

WarnerConstInc. said:


> 203k work sounds like a huge PIA. I like customers that have their own money in their checking account.


Some are not bad, some are pita.
But the customers with there own money are much better.


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## Garrett1605 (Dec 19, 2010)

You might want to talk to the lender. They can control her better than you can.


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## TxElectrician (May 21, 2008)

Garrett1605 said:


> You might want to talk to the lender. They can control her better than you can.


 
YOU may want to check the date of the OP :whistling


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## PTP (Jan 21, 2011)

*203k consultant*

This sounds more like an FHA Streamline loan. The HO gets 50% up front and then 50% at closing. The check is a two party check and her bank should not let her cash or deposit it because your company is on it. In other words she should be signing it over to you. 
The entire scope does need to be completed. If she is going to finace the windows MAKE sure it is completed before you finish your work, otherwise you may not be paid the alotted amount for the windows!!
Also, check with the Lender to see if there is a Contingency amount. Typically, there is an extra 10% in escrow. This is not always the case for a Streamline but it is mandatory for a 203k. I consult on these loans so feel free to ask me anything.


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## aptpupil (Jun 12, 2010)

curious how this one turned out...mike?


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## mikec (Jan 2, 2007)

Well, heres how it turned out.

First 203k consultant, let me say. The lender is on the side of the HO always and forever, and so is the FHA.

So we had everything done except putting in cabinets. Very straight forward. Literally ten feet of lowers with a laminate top, and eight feet of uppers. Exact layout that was there. Cheap off the shelf cabs.

Well miss new homeowner keeps bitching and moaning about what the cabinets will look like. I explained to her that the are natural oak, raised panel doors, just like the sample.

One day she calls, and asks how much do the cabs cost? I ask why, and she goes on to tell me about this place she found where the cabs are cheap, and she get nicer ones.

Finally I give in (mistake). I tell her she has X amount to purchase cabinets. Go there, pick them out, and I will go order them. But it has to be the same layout as I scoped.

Ok, she calls the next day to tell me the cabs are ordered. "What?"
"I ordered them they will be in right after xmas." Now I am leary.

Day after xmas she calls, the cabs are there, you can go install them. I go up there, and she has over twice the amount of cabs, crown molding, and a note saying "installer please build a six inch base to put base cabs on.
She's a very tall woman.

I call her and tell her that with all the xtra work she has, that the install price will more than double. She freaks out. So I leave.

Later on I call the bank. I tell the draw administrator the situation. She is shocked. She tells me that the woman is violation of her contract with me, the bank, and HUD. She calls the HO while I am on hold. When she comes back she tells me basically the woman is crazy, and not fear I will be paid for what I have done, if the time frame expires before the cabs are in.

However she says, the woman can fire me inwriting, and the bank would pay out for work completed. SHe goes on to tell me that it is in my best interest to work this out with the HO.

I call the HO the next day. She has a friend who will put in the cabs by the end of the week, we get the draw, and I get paid. I agree.

Well a month later after several calls to her, they aren't done with the the cabs. The timeframe for the 203k is coming to an end. I call the bank again.
Get the same draw administrator on the phone. I say hi, remember me, I called before about the ___ job?

She says "yes I remember, and I will tell you the same thing now, I did then. I can not talk to you about the loan. We work for the HO.

"What? But last time you told me about how......"

"I told you nothing! You need to call the hO."

So, I think someone got in trouble for talking to me the first time. 

At the end of it I got paid. The HO finished the cabs, and got the check around March 20th.

She was way beyond her deadline with the bank. The bank didn't care, they never made her get an extension, they never came out, and paid for what was already done.

With a 203k you will always get paid no matter what, but it can take a while.


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## PTP (Jan 21, 2011)

*whew*

That is definitely good to hear you were paid! With a 203k (not an FHA streamline) The Consultant usually) or at least should) let the HO know that as stated in the initial write up everything is based on medium grade and if she chooses to upgrade or change the layout it must be in the contract prior to settlement...glad yours finally worked out. If you ever run into another one let me know and I can assist you prior to the loan closing.


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## Splinter (Apr 5, 2005)

Mike, I dont mean to sound harsh or rude, but what is so hard about telling the homeowner, "This is the contract and scope of work you signed with me, and was approved by those actually paying for it. (the bank) There cannot be any changes now that the checks have been written." 

If the homeowner is using their own cash to fund a project, I have no problem doing what it takes to give them what they want.... When a third party is involved that can keep my money, I'll do what was agreed on so I get paid.


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## mikec (Jan 2, 2007)

Splinter said:


> Mike, I dont mean to sound harsh or rude, but what is so hard about telling the homeowner, "This is the contract and scope of work you signed with me, and was approved by those actually paying for it. (the bank) There cannot be any changes now that the checks have been written."
> 
> If the homeowner is using their own cash to fund a project, I have no problem doing what it takes to give them what they want.... When a third party is involved that can keep my money, I'll do what was agreed on so I get paid.



You are absolutley right. And it is what I should have done. And what I will always do in the future.


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## 203kconsultant (Jan 19, 2011)

*Tab bit confused?*

Was this a streamline K? (cost of repairs less than $35,000)
Was there a consultant involved in the transaction as all? 
Did anyone ever mention a consultant during the bidding? 

gs


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