How To Choose And Hire The Right FHA 203k Contractor

This BLOG On How To Choose And Hire The Right FHA 203k Contractor Was UDATED On August 16, 2017

The U.S. Department of Housing Administration (HUD) is the parent of the Federal Housing Administration (FHA).  HUD created and implement the FHA 203k Mortgage Program to promote revitalization of housing in neighborhoods throughout the U.S. FHA 203K Mortgage Loans is a great mortgage loan program for home buyers buying fixer uppers. Home Buyers of fixer uppers can purchase a home in a location they like that needs complete gut rehab and customize it like a custom home with FHA 203k Loan Programs.  Buyers of fixer uppers can purchase a fixer upper with the acquisition and construction funding all in one loan with 3.5% down payment of the after repaired value with FHA 203k Loans.

  • This will be the first in a series of articles that will attempt to give an honest and transparent assessment of several critical moving parts that make up the 203K.
  • There are two types of FHA 203k Rehab Loan Programs: Streamline and Full Standard 203k Loans.

Choosing The Right FHA 203k Contractor

Borrowers of FHA 203k Loans need to choose a HUD Certified Contractor.

I’ve watched homeowner/contractor relationships play out hundreds of times over the last twenty years. 90% of the time honest hard working contractors and sub-contractors work hard to complete the project in the prescribed time frame. In this article we’ll discuss the other 10%, how to vet them, and avoid them. Spending a little time now will save you a lot of time and headaches later.

Interviewing And Deciding On The Right FHA 203k Contractor

Know who the contractors who are being interviewed.

  • Were they a referral from a trusted source?
  • Have them fill out a Contractor Resume.
  • Call the referral sources that are listed on the resume.
  • Many times less than honest contractors will include friends and relatives that have been given the heads up to give a good review even though they’ve never had any work done.
  • Ask that person if you can come by and look at the work completed by the contractor. Listen closely to their answers.
  • Actual referrals from solid referral sources (friends and Relatives) are the best way to find a competent contractor.
  • Spending a little time now will save you a lot of time and headaches later.

FHA 203k Contractor Should Be Well Funded

FHA 203k contractor needs to be well funded.

  • They have to be able to fund your project until you can order the first draw.
  • Most are working on multiple projects and not just yours. 
  • Ask them if they have accounts with building supply companies.
  • If they say it’s none of your business than they more than likely don’t.
  • If a contractor does not have the funding to pay his people and have credit lines at the larger building supply companies, the project will take longer to complete if it gets completed at all.
  • Spending a little time now will save you a lot of time and headaches later.

Communication Is Key With FHA 203k Contractor

Lastly, if a contractor has communication issues now, they will multiply ten-fold when they’re involved with running your project.

  • Homeowners who can’t get a bid or response back at this point, take a pass.
  • Spending a little time now will save a lot of time and headaches later.

Home Buyers who need to get qualified for FHA 203k Rehab Loans, please contact The Gustan Cho Team at 262-716-8151 or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

Related> What Is A FHA 203k Loan?

Related> FHA 203k Rehab Loans

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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