​​203k Home Renovation – Rebuilding Neighborhoods, One Home at a Time!

​Cary Morrell

FHA Consultant ID: D1092

An FHA 203k loan allows you to borrow money, using only one loan, for both home improvement and a home purchase. These loans can also be used just for home improvements, but there might be better options available. 203k loans are guaranteed by the FHA, which means lenders take less risk when offering this loan. As a result, it’s easier to get approved (especially with a lower interest rate).

Some properties are “almost perfect” – the location is good, and the property has potential, but significant improvements need to be made.

Without those repairs, the home might not be suitable for living, and lenders might be unwilling to fund loans on a property with problems.

FHA 203k makes it possible for you to turn that property into a home (and to get that property off the market and make it a valuable part of the community again).

​​What you should do and when…​

  • Contact a 203k Lender and get pre-qualified. We can assist you in finding a lender in your area that we’ve worked with to insure that you’ll get the best service.
  • Hire a real estate professional to assist in finding a suitable property. Always choose one that understands 203k. (If you’re refinancing an existing loan with a 203k, a real estate professional is not needed.)
  • Set an appointment with us as your 203k Consultant. As your consultant, I will meet you at your site and review copies of the contracts and agreements required for the 203k loan given to you by your lender that you will need to sign prior to the close of the loan.After our meeting and the HUD/FHA Home Inspection that I will provide, I will create a “Job Specification & Bid Request”, which is a list of the FHA required repair items to be completed. I will also list inclusions you may want to add like new cabinets, flooring, windows, etc. I will also forward copies of the various reports to your lender to assist you in the loan process.
  • Get contractor bids by using the “Job Specification & Bid Request” prepared by me as your consultant.
  • Choose a contractor. As your consultant, I can assist you in this process and verify contractor compliance to the specifications. The lender will hire an appraiser and once the appraisal report is done, in most cases, your lender can close the loan.
  • Schedule the contractor to begin the work. Once the work begins, the contractor will require continuing inspections called “Draw Requests” to get progress payments for the work as it’s completed.
As your consultant, I will inspect the project and prepare these documents and repeat the procedure until the project is complete.

*Although the “Limited” program does not require a Consultant by FHA Standards, if the work to be done is valued over $15,000 and under $35,000, it would be recommended that you use the Consultant to prepare the “Job Specification & Bid Request” and to act as a “Plan Reviewer” to verify compliance with the specifications and to perform a “Final Draw Inspection”.

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