The consultant's job is to write up the bid specification and that has some "due dilligence" that goes along with the responsibility. It is often interesting to me how the RE agent and sometimes the Lender will push to get this done in 3 days and start calling every day thereafter to push this to an end. Lets look at the process...

1) Lender gets the loan started, they typically have it a week or two then pass it to us

2) We make an inspection and inform everyone that it should take about 4 days to a a week to gather all our data and put to gether the bid specifications... then it goes out to bid to the contractor

3) Contractor may take a day or two (many times a few days more than that to provide their bid to us

4) The contractors numbers are input and checked to see they are reasonable.

5) The report get finalized and sent to the lender so the appraisal can be ordered. 

6) The appraiser takes about 4 days to complete their report, then

7) The loan closes

Before 1994 the process took about 3 months or more to close a 203k in many cases, In 1994 when consultants were brought into the system it was designed to take about 6 weeks, but none of these 6 weeks was for the consultant, just the lender, etc... lol. NOT.

The consultant must do their due diligence too. Give us a week on smaller projects and up to two weeks on larger projects, and you won't be dissapointed. Just don't get everything else completed and give us 3 days to do all our work, there is more to it than that... 

The 203k loan process can go quite fast if you provide a reasonable time for the inspectons and report writing. 

M

Just about to wrap up another FHA 203k in Guerneville, CA. This was such a cute little home but the septic system had failed. This is just what the program was designed for. 

It was apparent from the start that this was going to be a small job as everyone knew the septic system had failed and that is all that was to constitute the "scope of work" but when we got to the property for the first time it was raining and the skylight was leaking with water all over the hardwood flooring. We spent the first half hour of the inspection drying the floor to minimize the damage that might have occured had we not been there. 

The job by any standard was a small one but since the rain came it showed all of us there was another issue at the home that no one had anticipated. Greg Loberg of Well Fargo Home Mortgage was the lender on this project. He is a pleasure to work with as he gets them closed. 

So many lender profess to be 203k lenders only to find that after 60 days they pass it off to someone like Greg who can close in 30-45 days consistently. Keep up the good work Greg. Greg should be your choice for renovation lending from San Rafael to Guernville.

The ASHI show was wonderful, actually allot better than I anticipated. I ran into Hollis Brown and Gary Smith among others. 

There were many 203k consultants represented at the event and a bunch of home inspectors who haven't yet seen the opportunities the FHA 203k and renovation loan consulting can be to them.

We teach 203k consultant how to "consult" as well as all about the 203k loan program. The program is set up to accept all with backgrounds in Home Inspection, Contracting, Architecture, and Engineering. Frankly Home Inspectors are the easiest to train to become consultants for about 70% of the process, and Contractors are the easiest to train for the other 30% of the process. The Architects and Engineers are a mixed bag of experience.

Home inspectors already know how to write a generic home inspection which is the "cornerstone of the consultant's report" according to the HUD Guideline. If you start with an inadequate "property inspection" you end up with an inadequate consultant's report and your project will likely be fraught with issues. Again the "home inspection" is already set up to provide a good description of the property being inspection and not try to "sell it". 

Many times a new consultant who isn't a home inspector will write the report as if they were trying to sell the home or property in question with too many adjectives. What we are looking for is to determine what the property's attributes are, what condition they are in, and what, if anything, will it cost to repair items that may need repair. Health and safety issues are of paramount concern as well as wear and tear that might render the home, under normal ongoing maintenance, evident that it might not last as long as the mortgage being placed on the property. That means it must have the appearance of lasting the typical 30 year mortgage term.

Lots of interest from the group as a whole and we are looking forward to starting their training this next week. This is really a "must do" for home inspectors as they will fall on a whole bunch of work naturally during the normal course of their home inspection business.

Hey guys and gals, I'll be visiting Charlotte, Spartanburg, and Columbia through the end of the year. You have been doing wonderful and keeping the 203k movement strong there and I wanted to congratulate all of you. David Sovde in Columbia SC, Walter Wilson in Charlotte NC, Brad Johnson in Spartanburg SC.

David has done exceptionally well from Columbia to Charlotte but primarily staying in SC with "David's 203k Consulting Service". He is a real asset to anyone looking for a good 203k consultant. He has been covering all the way to the coast.. Charleston for us. Our new guys in Charleston will be taking that area over right after the first of the year.

Brad Johnson owner of Absolute Inspection Service LLC has been covering the Greenville, SC and surrounding areas. What a pleasure it is to work with Brad, Our lender are very happy with his service in the 203k consulting and his reports are very thoughrough. Great job Brad.

Last but certainly not least, our Charlotte NC leader is Walter Wilson Insepction & Testing, a nicer person, better home inspector, and 203k consultant I don't think you will find anywhere. Wonderful to see you get into this profession Walter. Though it took me the better part of 2 years to convence you to start, it was clearly worth the wait. You do it all right.

Thanks for being a part of the Mike Young Team Guys. We really think you are tops.

Hey there  I see you have a new 203k consultant in an old familiar home inspector's suit... KC Johnson of ProCheck Home inspections. While KC has been inspecting homes for a number of years he has heard the call of the FHA 203k and other renovation loans and answered it.

If you have a home that is in need of repairs now KC can add the 203k Consultant's report for you and help get those loans closed faster. 

Lots of you are making and getting 203k offers on this type property and we are all appreciative. There are a few out that that continue to live with the myth that using the 203k loan might hamper the process or cause the loan to close slower... NOT TRUE. 

If your lender can close a standard FHA loan (203b) in 30 days there is no reason to take longer to close a full 203k. KC knows the secret to your success now and can walk you through the process. If your lender says it can't be done, you may need another lender. Our lenders do it all the time. 

Whenever you have a renovation loan it is just good business to put in your contract 45-60 day close in case something else comes up, a credit glitch or other issue but it won't be due to the 203k consultant that held it up. KC has been trained and is knowledgeable in how to make that process go much smoother than you might expect. Give him a try on your next 203k project.

The FHA Maximum Mortgage Limits are increasing to match the limits used earlier this year effective on January 1st 2011. That means in the high cost areas we will be back to $729,750... yahoo!

Don't forget the mixed use buildings with four residential units and fourplexes can go as high as $1.4 million. SF and surrounding counties this is your chance to move some of those mixed use and larger four unit buildings. 

Also rememember it can be anything before the renovation as long as it is 1-4 units after the renovation. 

You do the best you can to create a 203k software product and then to perfect it hoping it fits your needs as a 203k consultant. It does of course do that but the real test is when you have other consultants throughout the country tell you how much they like it. 

I've spent this week in FL where we were excited to hear from quite a few potential clients that have joined the 203k world and added it to their offering of inspection services. Many of them started off with our competitor's product only to find it didn't meet their expectations. That is too bad but we'll see if we can improve their 203k inspection business as they switch horses. 

If you have a favorite home inspector that you trust and feel comfortable with you may want to have them qualified to provide you with the FHA 203k consulting services. It is a great way for them to build their business with clients they already have. Tell them about us, you will be glad you did.

The FHA 203k loan program is alive and well in Walnut Creek, Orinda, and Lafayette. Wow. who would have thought. When I got into this product in 1994 the FHA loan limits were so low that the projects were always in low rent districts. 

Today we have many 203k projects where the borrower is buying a property that requires repairs in order to get a mortgage loan, where the values of the homes start at $500,000 and then they add the money for the repairs for another $150,000 and end up with a home that has equity. 

That has always been a priority for me when purchasing an investment property to make money on the "buy", when you purchase. Now we are seeing that is happening more and more with homes these buyers are going to live in. That is major news in this economy.

Question for all of you in the 203k lending arena. We are all aware that investors are out of the program but since non-profits are still in this question seems relivent.

There is a little known feature of the 203k that reads as follows:

Occupant owners attempting to sell their home may refinance the current mortgage with a 203(k) loan and make repairs and improvements prior to placing the home up for sale. If the purchaser of the rehabilitated property is a first-time home buyer, that buyer can assume the property without a down payment.

This, if it can be utilized would be very powerful and give the sellers a chance to maximize their profits on a home as they get it sold. it would also help realtors get larger commissions as they would be marketing morehomes at their repaired value.

The biggest problem is getting a contractor out to bid the job in a timely manner. 

In 2005 the FHA came out with the Streamlined k loan program. Light work, but included roofing, updating of bathrooms and kitchen, flooring, paint, etc, just no structural issues. It took off like a lightning bolt. Now, six years later there is allot of talk about lowering the construction amount to $10,000 (nothing formal as yet). This is being considered as too many of the Streamlined k loans are going south.

It sounds easy, just get a couple contractor bids and close the loan... lol. NOT quite. There is no oversight that there is enough money in the bid to do the job. If the contractors fail to bid on a repair like a cracked window or grading that is needed the loan then flips to a full 203k loan and mandatory repairs have to be added to the scope of work. 

Lets get back to the biggest problem... getting a contractor or two out in a timely manner to get that bid ceated. How can you improve the time it takes to close a Streamlined k loan?

Simply have a consultant involved. Consutlants have a list of contractors who are likey already validated by the lender, they put the "scope of work" together so the contractors are bidding the same list, and they bid the job much faster than a contractor... this is what we do.

Advantage is that you get a bid in to the lender much faster, you get that compliance inspection so there will be no conditions by the appraiser that force this loan to the Full 203k realm. Your loan closes faster, smoother, and we guarantee you that the contractor's bid will follow close behind.