PG Goodman FHA Consultants
© 2013 by Phil Shaw
HUD offers two types of 203k construction loans—the Streamline and the Standard.
203K Streamline is tailored for simpler improvements costing less than $35,000 like painting, new flooring, replacing new fixtures, or other enhancements.
50% of the funds are released upon close of escrow and no 203K consultant is required. But the customer will have to fund the remainder of the loan and be paid at the completion of the project. No moderate structural improvements are allowed. Lenders may require additional conditions based on the complexity of improvements.
The 203K Standard is for construction loans over $35,000. A HUD 203K consultant is required to oversee the entire project. Release of construction funds are paid through draws based on completed work. It’s best to contact a 203K consultant as soon as you decide that you want to participate in the 203K program.
The 203K consultant’s primary role is to assist and oversee the entire process from initial feasibility to final draw inspection. The consultant is hired by the buyer, but are the eyes and ears for HUD. It is also beneficial to the buyer to have someone experienced (consultant) in working with general contractors, to ensure quality, integrity, and that deadlines are being met. At the same time, general contractors and lenders appreciate the 203K consultant’s role in facilitating timely processing and payments of draws.
FHA Home Buyer Property Evaluations - The Better Alternative For FHA Buyers