Approval Process & Consulting

[randynavarro]

So Randy, how do you create the repair estimates? Do you get contractors to give you written bids and then transfer that to your own documents?

If the buyer is doing the 203k and buying the house, ninety percent of the time I don't provide cost estimates. Sometimes I'll do a Feasibility Study if the buyer has absolutely no clue how much money will be needed to reahb. the home.

Otherwise, I generate the list of work orders and let the contractors bid them. It doesn't make sense for me to provide a cost estimate. If I do, then I'll be re-doing paperwork because the underwriter requires that my numbers match the contractor's numbers.

So I just let the contractor say what the price is going to be and use his numbers for my paperwork.

Just this week, two contractors bid the same scope of work for some drywall; one guy bid $950; the other guy bid $4,300. Go figure. What numbers is a Consultant supposed to "estimate" ?!

[randynavarro]

I continue to have questions about details of what the 203k Consultant is required to do. In that some of the items (depending upon interpretation) can run up against other State Agencies in Texas.

203k Consultant has to comment about "termites" ... you must be licensed by the Texas Dept of AG to perform a WDI inspection/report. As a licensed "home inspector" (I'm not a pest inspector) I have to be very careful of what I say in my reports about such WDI items.

203k Consultant has to perform a "home inspection" and advise of adequacy of certain items. That falls into the territory of control of TREC and one has to have a Professional Inspector's license to do such an inspection. Then we have to use the TREC-mandated inspection template.

Granted what we look at from the TREC view is far more detailed than what HUD 203k is looking for, but then there are other things they are needing that TREC does not touch on.

Bottom line is that any property sold in Texas and if someone needs/wants an inspection ... the inspector HAS to have a TREC license.

I'm seeking clarification with the Denver HOC so hope to hear from them yet today.

I think HUD was unaware of such state requirements when they used the term 'home inspection'. They're not aware that it's a legally defined term now, otherwise they would have given it a different name.

If such an issue were to come before the Louisiana State Board of Home Inspectors, my guess is that's how they would respond to it. A similiar question that I put before a board member years ago turned out that way.

Marc

Bingo to all of the above!

HUD does not *require* a "home inspection." They require the consultant to *review* the property. Nowadays, they just call it a home inspection.

In modern terms, a home inspection is what all of us do. Most of us operate under state licensing that says if we do a home inspection, then we must perform minimum duties.

In the presentation, it was stated that the Consultant must perform a home inspection, ensure the home is free of termites and rodents (hmm, sounds like a WDI or WDO inspection to me), and must prepare the architectural exhibits without the aid of an architect or G.C..

All for the low price of. . . . whatever the fee schedule says that was written in 1992 or 1994!

That's just not possible. Other consultants I've talked to have creative ways around this fee schedule in order to substantiate more realistic fees--myself included.

Rumour has it the program is being significantly revised this May. Hopefully, some of these shortcomings will be addressed.

[randynavarro]

I think Randy should do a webinar for us. I'm certain he'd start on time, explain the program rather than misread the slides, and we'd actually learn something in the process. Oh, and if he set us up for 2 hours of training we'd get a lot more than 45 minutes. Thank God it was only 45 minutes!

I'd be glad to; however when it comes down to it, I really have no authority. As I've said, I've developed my systems and procedures based on my interpretations of the FHA material, taking some bumpe and bruises but ultimately being through, consistent, and staying within the program guidelines. I've been able to be profitable-barely.

[Nolan Kienitz]

I agree that we continue to "arm twist" Randy for a Webinar ... at least for a "feet on the ground" view of the 203k ... IE: basic processes, procedures, etc..

Understood that he can't speak for HUD and the 203k program.

I know I've bugged him more than once over the past year or so with some questions.

FYI ... I got a message this morning from another inspector in the Houston market just advising that there have been a number (count un-defined in message) of lawsuits involving many 203k re-habs in the Gulf Coast/Galveston area. Don't know the time frame or any other details.

Now that snippet is just that (a snippet out of context) ... lawsuits are possible with any discipline/profession ... inspections are no different and that would also include 203k consulting.

[Mark P]

So Randy, how do you create the repair estimates? Do you get contractors to give you written bids and then transfer that to your own documents?

If the buyer is doing the 203k and buying the house, ninety percent of the time I don't provide cost estimates. Sometimes I'll do a Feasibility Study if the buyer has absolutely no clue how much money will be needed to reahb. the home.

Otherwise, I generate the list of work orders and let the contractors bid them. It doesn't make sense for me to provide a cost estimate. If I do, then I'll be re-doing paperwork because the underwriter requires that my numbers match the contractor's numbers.

So I just let the contractor say what the price is going to be and use his numbers for my paperwork.

Just this week, two contractors bid the same scope of work for some drywall; one guy bid $950; the other guy bid $4,300. Go figure. What numbers is a Consultant supposed to "estimate" ?!

Thanks - from the HUD webinar the other day they said the consultant came up with the estimates, or at least that is what I gathered.

[203K]

If the buyer is doing the 203k and buying the house, ninety percent of the time I don't provide cost estimates. Sometimes I'll do a Feasibility Study if the buyer has absolutely no clue how much money will be needed to reahb. the home.

Otherwise, I generate the list of work orders and let the contractors bid them. It doesn't make sense for me to provide a cost estimate. If I do, then I'll be re-doing paperwork because the underwriter requires that my numbers match the contractor's numbers.

So I just let the contractor say what the price is going to be and use his numbers for my paperwork.

Just this week, two contractors bid the same scope of work for some drywall; one guy bid $950; the other guy bid $4,300. Go figure. What numbers is a Consultant supposed to "estimate" ?!

I use a HUD recommended HomeTech estimating book to create a rough estimate for the buyer. This "rough estimate" of repairs spells out the mandatory, recommended and desired items that's included in the Work Write Up document the lender and appraiser uses to help qualify the buyer. We worked over 70 loans last year here in Central MS.

Randy, I see you near Kirkland on this kool National 203K HUD Consultant Roster Map! If you know a contractor in your area, send them to this site and have them get listed for free on the map! Locate the map here: my203k dot info / maps

[randynavarro]

So Randy, how do you create the repair estimates? Do you get contractors to give you written bids and then transfer that to your own documents?

If the buyer is doing the 203k and buying the house, ninety percent of the time I don't provide cost estimates. Sometimes I'll do a Feasibility Study if the buyer has absolutely no clue how much money will be needed to reahb. the home.

Otherwise, I generate the list of work orders and let the contractors bid them. It doesn't make sense for me to provide a cost estimate. If I do, then I'll be re-doing paperwork because the underwriter requires that my numbers match the contractor's numbers.

So I just let the contractor say what the price is going to be and use his numbers for my paperwork.

Just this week, two contractors bid the same scope of work for some drywall; one guy bid $950; the other guy bid $4,300. Go figure. What numbers is a Consultant supposed to "estimate" ?!

Thanks - from the HUD webinar the other day they said the consultant came up with the estimates, or at least that is what I gathered.

Yes, you're correct. The Handbook also outlines that the Consultant does the cost estimating; however, in my experience this doesn't provide any benefit, nor does it save any time.

In the interest of keeping the already-time-consuming process most efficient, I use the contractor's numbers. To illustrate:

Sample 1

1) Inspect

2) Create Work Write Up detailing required and desired work.

3) Create cost estimate

4) Contractor bids project

5) Revise Work Write Up to reflect what the borrowers have actually chosen what they and the contractor have decided.

6) Complete package for bank

Sample 2

1) Inspect

2) Create Work Write Up detailing required and desired work.

3) Contractor bids

4) Complete package for bank.

Obviously Sample 2 is less time consuming and generates less paperwork and overall confusion.

[mgbinspect]

Yo Ben!

After a bit of invaluable e-mail and phone mentoring from the ever so gracious Brother Navarro (bless you sir), I just mailed off my Resume/Application today.

Typically when real estate is wobbly, additions and renovations are up.

You doin' this, or what?

PS. No, I didn't make it snowboarding one time this season, and I'm sick about it. But, hiking season is ahead. I'll hit the slopes in better times ahead.

[Tom Raymond]

Hey Randy, where's my email mentoring?[:-cry] My application was returned as incomplete, apparently the resume and cover letter didn't meet the "narrative description" requirement. It's also a complete PITA to find all of the documents and revisions that are on the affidavit, multiple websites and links that run you around in circles-if they open at all. A few pointers would be greatly appreciated.

Mike, there's still snow here. I'm hoping Mom and the baby will be content enough to let me and the boy sneak in a few more runs before it's all gone.

[mgbinspect]

Hey Randy, where's my email mentoring?[:-cry] My application was returned as incomplete, apparently the resume and cover letter didn't meet the "narrative description" requirement. It's also a complete PITA to find all of the documents and revisions that are on the affidavit, multiple websites and links that run you around in circles-if they open at all. A few pointers would be greatly appreciated.

Mike, there's still snow here. I'm hoping Mom and the baby will be content enough to let me and the boy sneak in a few more runs before it's all gone.

Oh, no doubt mine's bound to come back too then. Randy didn't hold my hand during the application process. He just helped me wrap my brain around what the service entails. And with that probable event in mind, if you figure out the application process before me, enlighten me!

mike at mgbinspect dot com.

[Ben H]

I have not. Yes, I'm a slacker. But I think I will do that tomorrow. I went twice this year. Funds were low, so we had to be picky about what we did with the what little extra cash we had.

[randynavarro]

Yea, I don't have any tips on the application part as its been 13 years since I did mine. I have no clue what I sent!

Suffice to say, as you all know, the application lands on some bureaucrat's desk and all bets are off on what will happen. Common sense and intelligence aren't pre-requisites for reviewing applicaions and paperwork for the feds.

Regarding 203k stuff, there really isn't a good discussion forum that I've found on the web. It might be nice to create a 203k forum category here and if any or all you guys get going, it be good to have a place to kvetch. It could become pretty well utilized. . . maybe not.

[Ben H]

Yea, I don't have any tips on the application part as its been 13 years since I did mine. I have no clue what I sent!

Suffice to say, as you all know, the application lands on some bureaucrat's desk and all bets are off on what will happen. Common sense and intelligence aren't pre-requisites for reviewing applicaions and paperwork for the feds.

Regarding 203k stuff, there really isn't a good discussion forum that I've found on the web. It might be nice to create a 203k forum category here and if any or all you guys get going, it be good to have a place to kvetch. It could become pretty well utilized. . . maybe not.

I can have one up tonight if the want is there. Just tell me to pull the trigger.

[randynavarro]

Yea, I don't have any tips on the application part as its been 13 years since I did mine. I have no clue what I sent!

Suffice to say, as you all know, the application lands on some bureaucrat's desk and all bets are off on what will happen. Common sense and intelligence aren't pre-requisites for reviewing applicaions and paperwork for the feds.

Regarding 203k stuff, there really isn't a good discussion forum that I've found on the web. It might be nice to create a 203k forum category here and if any or all you guys get going, it be good to have a place to kvetch. It could become pretty well utilized. . . maybe not.

I can have one up tonight if the want is there. Just tell me to pull the trigger.

I was thinking of creating a category here on TIJ. Do you have administrative control to do that or are you talking about creating a whole other site?

There are already a few very poorly attended 203k discussion sites I've come across. Given the small amount of folks interested here, it seems easiest to just add a category here. I don't think there's enough of us to populate a stand-alone site.

I could be wrong.

[Ben H]

I was talking a whole other forum, but a section here would be just as well I suppose. I imagine it would be kinda skim on members, but we could take it another direction in a way that we could utilize it as a search database for folks to find consultants, talk with each other, and general info on 203k stuff.

Call it 203talk.com or something like that.

I really don't care either way, I was simply offering an option.

[mgbinspect]

Yea, I don't have any tips on the application part as its been 13 years since I did mine. I have no clue what I sent!

Suffice to say, as you all know, the application lands on some bureaucrat's desk and all bets are off on what will happen. Common sense and intelligence aren't pre-requisites for reviewing applicaions and paperwork for the feds.

Regarding 203k stuff, there really isn't a good discussion forum that I've found on the web. It might be nice to create a 203k forum category here and if any or all you guys get going, it be good to have a place to kvetch. It could become pretty well utilized. . . maybe not.

I can have one up tonight if the want is there. Just tell me to pull the trigger.

I was thinking of creating a category here on TIJ.

I think you should, Randy...

Can he? can he? can he? Mike, Huh? Huh? Huh? [:-sonar]

He really seems to know his stuff. He's helped me immensely - a shoe-in...

[Bill Kibbel]

It looks as if I have access to create a new forum here. Give me a subject line and a brief description and I'll give it a try.

[mgbinspect]

It looks as if I have access to create a new forum here. Give me a subject line and a brief description and I'll give it a try.

Well, there ya go, Randy. You definitely have the consultant part down. [:-graduat

And, Tom, Ben and I can share our hard knocks from the current approval process. [:-dunce]

This could be a very useful thread. [:-thumbu]

Bill, I've modified the thread title to cover all the bases, so you can move the whole thread wherever you wish.

[mgbinspect]

Merely as a starting point of reference, here is a link to the specific requirements that must be met in your applications:

http://www.hud.gov/offices/hsg/sfh/203k/203khow.cfm

I've mailed today a resume meeting the list of requirements, and added a statement confirming that I read and fully understood all the letters and documents, which actually I'm in the process of reading, but since it apparently takes a couple weeks, at best, to get approved, I figured it was safe to make that statement.

Is this the format you followed, Tom, and it still got kicked back at you?

[Tom Raymond]

Yes, exactly.

Your license number will not be adequate proof that you are licensed. They will want a copy of the document.

The resume and cover letter did not satisfy the 'narrative description' requirement. Snipped from their email: A narrative description of the prospective consultant's ability to 1) perform home inspections, NY issued me a license to perform home inspectionsid="blue"> 2) prepare architectural drawings, 9 years experience as a kitchen and bath, and project designerid="blue"> 3) use proper methods of cost estimating 15 years experience selling everything from log home kits to sunrooms to replacement windows, can't sell it if you don't know what it costsid="blue"> and 4) complete draw inspections;well, I'll give them this last one, but I negotiate progress payments on every job I sellid="blue"> each of the 4 items have to be addressed.

There is an affidavit form that must be filled out and mailed to the HOC. They need a legal signature-it's not witnessed or notarized, so it's hardly legal, but... If you will be under the Philadelphia HOC I can email you the certification form. If you can't catch the mail then you might as well wait for them to kick it back. FYI, they gave me a direct link to the mortgagee letters, most of the letters on the affidavit are not at the link.

They will also want any URLs that you may have so they can check you out on the web. Just what I want to do is pay some gov't employee to surf the internet.[:-banghea

[Tom Raymond]

I almost forgot! Thanks Bill for giving this topic it's own page. I hope we can put it to good use.

[mgbinspect]

Yes, exactly.

Your license number will not be adequate proof that you are licensed. They will want a copy of the document.

The resume and cover letter did not satisfy the 'narrative description' requirement. Snipped from their email: A narrative description of the prospective consultant's ability to 1) perform home inspections, NY issued me a license to perform home inspectionsid="blue"> 2) prepare architectural drawings, 9 years experience as a kitchen and bath, and project designerid="blue"> 3) use proper methods of cost estimating 15 years experience selling everything from log home kits to sunrooms to replacement windows, can't sell it if you don't know what it costsid="blue"> and 4) complete draw inspections;well, I'll give them this last one, but I negotiate progress payments on every job I sellid="blue"> each of the 4 items have to be addressed.

There is an affidavit form that must be filled out and mailed to the HOC. They need a legal signature-it's not witnessed or notarized, so it's hardly legal, but... If you will be under the Philadelphia HOC I can email you the certification form. If you can't catch the mail then you might as well wait for them to kick it back. FYI, they gave me a direct link to the mortgagee letters, most of the letters on the affidavit are not at the link.

They will also want any URLs that you may have so they can check you out on the web. Just what I want to do is pay some gov't employee to surf the internet.[:-banghea

Oh goodie!.. Yeah, mine's coming back for sure. Dang it. Oh well, welcome to the world of bureaucracy.

[Nolan Kienitz]

Trying to figure out exactly what a bureaucrat will want or even understand on the application is a task that will likely remain unresolved.

My first application was rejected as the person reviewing my application had it in her mind that I HAD TO BE an architect. I was denied because I was not a licensed architect.

I had all the bases covered from breakfast to dinner and then some, BUT ... I was not an architect.

I appealed and was again denied because I was NOT an architect.

I even called and tried and appeal ... NOPE ... I was NOT an architect.

So you can see where the mindset (at least for this staffer and supervisor) was locked in.

So ... I just put the application in the file and let it sit for ~3-months. I pulled it out, dusted it off, refreshed some letter/document dates and resubmitted.

No word at all from FHA/HUD (I under the Denver POC) and about 2-weeks later I happened to look online and there I was ... on the HUD 203k Consultant list.

A paper letter indicated same showed up a week or so later.

Now ... go figure. No changes to the application. It is a matter of who looks at the document.

Obviously ... different interpretations from various guvment staffers.

[203K]

I started a forum in three places. They're all free and have been working for months. I've worked hundreds of these inspections/remodels over the years and I'm here to help anyone that needs help.

Search Facebook for "FHA 203K Pros"

Search LinkedIn for "203K Consultants"

Stand alone forum "203K Forum" dot com

Gary Smith

Mississippi - 203K Consultant/Contractor

Join and share.