Paul Lesieur, 203k consultant.
I started 203k consulting after 30 years as a Minneapolis based General Contractor, I hold accreditation for Kitchen and Bath Design, General Contracting, Estimating and Universal Design, the last meaning home improvements for people with special home needs, such as physical accommodations to make your home life more enjoyable.
This is a great time to consider a 203k home loan, this type of loan helps you, helps the economy and puts the country back on the track to Americans owning their own homes.
When rehabbing having a plan works best, we will help you plan your 203k remodel.
In this site you will find links to the HUD site and other places that will help you decide if this is a good way for you to own a home.
Please check out the site for answers to the most common questions. Or Call Paul directly at:
What makes a good 203k rehab consultant?
An understanding of how the 203k rehab process works, including what it should cost and how long it should take
Building knowledge and good communication skill are needed.
Hire a consultant who understands that the Realtor, home buyer, lender and the contractor all work for you.
Why do you need a consultant to pay the contractor?
Good question and this is the answer.
After the 203k loan is closed and the rehab funds are put into escrow your contractor starts ordering materials to begin work. The demolition starts and then the contractor starts doing the repairs according to the written scope of work that was approved by all parties.
The 203(k) program is different in that it requires that the Contractor to provide ALL the funds to begin the project, and the contractor isn’t paid until the Consultant is called for a Draw Request or Change Order invoice.
To pay the contractor you need the 203k consultant to approve the draw request.
Inspections by the local permitting authority, the City or County, still have to occur as required by the General Building Permit. Typically the 203(k) Consultant is called at the same time to verify that the Permit has been signed and all construction (labor and materials) have been put in place as set forth in the Specification of Repairs. A maximum of 5 Draw Requests can be called in… typically they occur at 30/60/90% intervals and then the final 10% when the Punch List is substantially completed. The fifth inspection is to insure that the property has been turned over to the Borrower in good condition, and to release the 10% holdback to the Contractor.
Your 203k Consultant visits the property, makes sure that all FHA minimum standards are being met, then checks to make sure the work is done as specified in the work write up and construction is up to code (IBC Standards). The Consultant should give you peace of mind and is your assurance that everything is being done as it should.
At each Draw Request inspection, the Contractor is required to sign a Lien Waiver for the amount they are given, making sure that all subcontractors and material suppliers have been paid. The lien waver document is turned in with the formal Draw Request, is considered mandatory by the lender, and insures clear title for the property. The check usually arrives within 7 to 10 business days (but some banks take longer so ask your loan officer how long it will take) and is issued in the name of the Borrower and the Contractor.
You, the homeowner, sign the check over to the contractor and the contractor is paid for work done.