HUD and the FHA do not have a certification for 203K contractors. Any company can do these 203K rehab jobs if they meet the lender requirements which are:
1. Must be licensed if required by their local goverment.
2. Must be insured to minimum $1,000,000 liability.
3. Must be solvent or they may need to prove they can wait for payment.
4. Must have good credit and good references.
When doing a 203K keep in mind there are 2 versions of the K.
1. The streamline K allows up to $35,000 in repairs and no structural work is allowed.
2. The full K allows structural work and can go up to a $365,000 loan to purchase the property and do the repairs.
A 203K contractor must be able to provide a bid for the work that is broken down by line items describing the work with materials and labor called out separately.
For example: Install 2000 square foot of drywall. Materials $1200.00/ Labor $2000.00/ TOTAL: $3200.00
So, what is a certified 203K contractor?
Anyone who claims to be certified may have joined a group that expects contractors doing the 203K to pass a test composed of questions relevant to the 203K loan. In truth these contractors are no different than any other contractor and are in no way guaranteed to be better as far as quality of their work.
When hiring a contractor for your 203K rehab make sure they are licensed and insured in Minnesota. 203K certification is not a HUD/ FHA certification and your certified contractor will be no better or worse than any contractor you find who meets the banks guidelines for participation in the 203K program. Your hiring a contractor, not a certification so do your homework and ask questions until you feel comfortable with your contractor choice.