HUD 203k Consulting

HUD 203(k) renovation loans provide a means for owner occupants to purchase or refinance a property and borrow funds to repair, renovate, update and customize the home. The program is very flexible – virtually any house that has ever had a certificate of occupancy qualifies. A house can be reconstructed entirely as long as some part of the original foundation remains.

The process begins with an ACE Home Inspection and a Feasibility Analysis performed by your HUD certified ACE consultant. The property is examined to determine what is necessary to meet 203(k) program standards, and the buyer is interviewed to understand what, if anything, they want to do that exceeds minimum standards. A program overview, rough cost guesstimate and feasibility opinion is issued in the field. A written Feasibility Analysis Report is delivered shortly thereafter.

The feasibility analysis is valuable in several ways. If the property qualifies for streamline funding (less than $35k renovation budget and no structure repairs), the consultant’s participation ends. Sometimes, the feasibility inspection identifies mandatory repairs that exceed the buyer’s borrowing capacity. If they are unable to proceed with the purchase, out of pocket expenses are minimized. If all is well and the buyers want to move forward, the next step is to develop a Specification of Repairs.

The Specification of Repairs is a detailed description of all tasks necessary to renovate the property. The consultant will estimate repair costs and deliver a Bid on Repairs form that the buyer may use to obtain quotes from the contractors they choose. After a contractor is selected, the consultant will review the bid, make necessary revisions to the Specification of Repairs, and provide a Work Write Up Package for final loan processing.

After the loan closes and construction begins, the consultant will perform periodic Draw Inspections to verify completion and adequacy of work. The project is formally closed out when all work is complete, and the buyers live happily ever after!

The Feasibility Analysis is $100 plus the cost of the ACE Home Inspection. Home inspection fees depend on the size, age, and foundation type of the house. Consultant fees for the Work Write Up package are defined by HUD and are dependent on the dollar cost of the renovation; they typically start at $600.