Loan Administration

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What is Renovation Loan Consulting?

As your renovation loan consultant, we assist you through the entire process. Outgrown your current home, and you think can’t afford your dream home? There’s never been a better time to renovate. Mortgage rates are at historic lows, but they won't stay that way forever! The idea of creating a living space exactly the way you envisioned it, with everything new and inviting, may be reason enough to remodel your current home or buy a fixer-upper. For most of us, remodeling a home is a once-in-a-lifetime experience that can be both exciting and intimidating. How you pay for the renovation of your home is one of the most important things to consider. The cost of our consulting service is included as part of the construction cost. 

A 203k Consultant's Role

A 203k Consultant, also known as a HUD Consultant, acts as a project manager for these types of loans – We review and verify the accuracy of the Contractor’s estimates, timeline, and ensure all required repairs are completed. With the long list of moving parts, the designated 203k loan Consultant is a key player on your Rehab Loan Team. As a Consultant, we are also responsible for obtaining Lien Waivers during draw inspections so make sure that sub-Contractors have been compensated correctly and also protect the homeowner form mechanic’s liens. Doing this gives you the option, that if you are not happy with the work done, to have your Consultant request the Contractor correct any issue prior to payment.

Their involvement through each step is the following:

1.) Initial Consultation

Choosing a HUD 203k Consultant before you write an offer allows you to make the most informed decision before you buy. While they are not a home inspector, through understanding how projects work through experience, they can make an onsite visit and provide an idea of potential rehab costs and FHA requirements, which could allow you to negotiate a better price. From there, they will review all mandatory disclosures and inform the client about the process moving forward. A good Consultant will review forms with you, including:

• Consultant Agreement
• Borrower’s Acknowledgement
• Borrowers Acceptance of Conditions
• Rehabilitation Agreement
• Homeowner/Contractor Agreement
• Self Help Agreement 

2.) Initial Inspection

If the property is already under contract, your HUD 203k Consultant will travel to perform a site visit and feasibility analysis to determine FHA-required repairs and better understand the scope and specifics of the modifications. At this time, they may make recommendations based on knowledge of property value and types of improvements to enhance a home’s value.

At this stage, the Consultant will complete a limited property inspection report (also known as the 203k Program Compliance Report) to determine any property defects required to be repaired according to the FHA’s Minimum Property Standards (MPS) 

3.) FHA 203k Lender Write Up

After talking with a homeowner and decided on what renovations and repairs will be made, your Consultant will draft a “scope of work” document for a Contractor’s bid. This will describe the entire project in full detail so all Contractors bid the same list of required repair and remodel items.

A Contractor will use the Scope of Work Contractor Bid Package to provide the homebuyer with a detailed bid with the total cost of improvements (labor and materials included). Your Contractor will negotiate with Contractors, making sure the borrower gets the most out of the repair budget.

Next, your HUD 203k Consultant will prepare a detailed description of the property repairs for you lender. This write-up will include the borrower’s desired upgrades, line item descriptions and pricing, as well as FHA and building code compliance.

Once the bid specs are complete and the total cost projection is calculated by the Consultant, the specs are reviewed by the borrower for corrections, deletions, or additions.

4.) Prepare Contractor Bid Packages

Once the Work Write up is completed and approved by the borrower, a final written estimate, called “Scope of Work” is created to provide Contractors with a bid package. Your 203k Consultant will prepare Contractor packages that will help bring in better bids, helping you make a better decision about which Contractor is right for you and your project.

5.) Work Write Up

At this stage, the HUD 203k Consultant will prepare the Work Write Up required by the lender to process the loan. This write up will contain a few things:

• Summary Page
• Contracts listed in Step 1
• Any Architectural Exhibits (official papers that include a sketch of the building if a wall is being a relocated, or a map of septic or well systems)

6.) Facilitate Contractor Relationships

Your HUD 203k Loan Consultant works for you to ensure quality and communication with both your Contractor and Lender to be sure you receive the quality work you deserve. Your Consultant will also gather signed Lien Waivers during draw inspections, work with the Contractor to request any repairs or issues prior to payment, and ensure at all times that there is enough funding to complete your projects.

Loan Types

203K Loan

The Federal Housing Administration (FHA) 203(k) mortgage insurance program enables borrowers to purchase or refinance their home and include the cost to renovate it in the same loan. The Standard 203(k) program allows improvements including structural changes and additions to the building footprint ​​​​​​​

Homestyle Loan

FNMA Homestyle Homebuyers can make renovations, repairs, or improvements adding up to 50% of the “as-completed” value of the property with this single loan. The funds can be used for any repairs or renovations that are permanently affixed and add value to the property. The Homestyle program can even finance investor-owned properties.

VA Home Renovation Loan

Similar to other renovation loans, through VA renovation loans, borrowers can finance both the purchase price and necessary repairs, or refinance and repair an existing home.

Accessory Dwelling Units (ADU)

Smart Additions for Economical Space! Home renovation is not just fixing up existing space, adding room additions and Accessory Dwelling Units (ADU) is a smart way to create more usable space and increase your homes value. Most people are familiar with finishing the existing basement to create more usable space, but more people are now also turning to adding Accessory Dwelling Units. What is an Accessory Dwelling Unit? Essentially, an Accessory Dwelling Unit is a detached or attached addition to your home. Guesthouse, Granny Suites, legal 2nd unit on a single lot or She Sheds are all examples of ADU’s. ADU'S are a great way to provide in-home care while still living independently. With today’s new lifestyles, and multi-generational living arrangements, additional multifunctional space at home offers cost-effective solutions to today’s living arrangements. EUCO specialists will work with you to plan your project, and help you to secure financing. Give us a call!

Ready to Get Started?

The first step is to set up a 30-minute phone call so we can guide you in the right direction in terms of contractors, lenders, and the scope of your project.

Schedule An Appointment