Does the contractor's bid have to match the consultant's bid?

Home Inspector with, covering the USA S0289

I hear this all the time that the bids don't match on an FHA 203k loan.

Some lenders make us match penny for penny on a line item, others want the labor and materials to line up exactly penny for penny. 

Hello? Anyone there? NO, they don't have to line up penny for penny. That is NOT in the Guideline. If you find it there let me know, you won't as it isn't there. I had a call from HUD a couple years ago as they caught some consultants where every bid matched penny for penny with the contractor's bid and I was told if mine did they would remove me from the HUD consultant list. It is a Lender thing, they like things to match penny for penny, a lender supplemental requirement but in total conflict with the HUD Guideline. 

The guideline actually states something like this... as long as the contractor's bid is within the contingency reserve of the consultant's bid close the loan. There is nothing in the guideline that states they two bids must match. 

Why do they do it then? That is the question isn't it?

If your consultant's bid comes in at $65,000.00  with a 10% contingency reserve and the contractor's bid comes in at $68,000... CLOSE THE LOAN WITH THE CONSULTANTS BID. Increase the contingency if you like but close the loan. This was done intentionally by HUD to help close loans faster yet the lenders circumvent the solution for one that delays the closing.

Some lenders are going to be anal about this and demand they two bids match... find another lender next time.... no don't do that as they all are guilty of this. 






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Mike Young, 203k Team Leader    Mike ready for your 203k order

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