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203k Consultants & States w/Inspector Licenses


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HUD sent a letter to all 203k Consultants in the USA stating that if they are located in a state that requires inspectors to have licenses that the consultant must provide a copy of the current/active license to HUD by 01/02/2012.

If not provided the consultant will be removed from the 203k roster.

No grandfathering to be allowed from what a HUD contact told me this afternoon.

The impacted consultants can go through the requirements of the respective state and obtain their license and provide to HUD and stay on the list ... assuming all such could be done before the end of the year.

If not ... they will be removed from the list.

They can re-apply for consideration to be put on the list once they have the required inspector's license ... but having been on the list in the past is no 'lock' in being re-listed.

Does not impact states that do not require inspector licensing.

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They can probably blame us for that.

As I recall, someone complained to our board months ago that a local non-profit that helps folks get low-income housing only accepted reports from inspectors that were HUD certified, but there were guys on the local HUD list that weren't licensed.

I was tasked to check it out and confirmed that out of about a dozen guys four or five of them weren't licensed. I then called the guy running the non-profit and spent about fifteen minutes on the phone with him, cluing him in about all of the changes where inspectors are concerned. He was totally uninformed; he hadn't heard that licensing had come in and none of the inspectors had told them anything about it. He said that he'd be re-writing their policy.

He gave me the information of the HUD guru that's in charge of that stuff and I passed it along to Rhonda at DOL with a recommendation that she give the guru a call to point out that they haven't been scrubbing their lists. She reported to us at a later meeting that she'd done exactly that and that the guru had said that HUD was going to follow up with a memorandum to all inspectors currently on their lists and tell them to get current with their state rules or be removed. Guess he was true to his word.

Rhonda said that a couple of the guys on this state's list are getting their ducks in a row but that at least one guy decided to throw in the towel rather than become licensed.

If memory serves, and it often doesn't, it was someone here that first brought this to light. Was that you Robert J.? If so, I hope you're happy your tax dollars are working.

ONE TEAM - ONE FIGHT!!!

Mike

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Or it could have been North Carolina Licensing Board...

The executive director has been interacting with the Feds about this and similar fed programs that state the fed inspectors must meet the state requirements if state licenseing is in place. He claims the feds responded, we are the feds and we can do what we want. If we want to enforce we will, and right now, we are not concerned.

Maybe getting feedback from several states helped?

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Or it could have been North Carolina Licensing Board...

The executive director has been interacting with the Feds about this and similar fed programs that state the fed inspectors must meet the state requirements if state licenseing is in place. He claims the feds responded, we are the feds and we can do what we want. If we want to enforce we will, and right now, we are not concerned.

Maybe getting feedback from several states helped?

Or maybe being told that any inspection done by a HUD certified guy who isn't licensed is tantamount under state law to waiving the inspection contingency and folks will end up owning homes even when they didn't want them based on the illegal inspection results helped. Who cares, the good thing is that they are finally on the same sheet of music and understand that, though they are only required to produce that weak little checklist report for Uncle Sam, they still need to have a contract, perform the inspection to the state SOP and produce a report that fully complies with state law.

ONE TEAM - ONE FIGHT!!!

Mike

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I didn't get a letter. Perhaps the HOCs are scanning their lists and only mailing to those not in compliance? The Feds aren't that efficient are they?

Not according to the letter.

It was addressed to: All FHA 203(k) Consultants

I've attached a scanned copy.

Download Attachment: icon_adobe.gif 091311_HUD-Letter.pdf

36.89 KB

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This has been in the works for about two years. It was brought up at the 2009 ARRELO meeting. This is the organization for real estate regulators and licensing boards (also includes home inspector and appraiser licensing boards). They formed a task group to explore it, on that group was a HUD offical out of DC.

My best guess is that this the result of that task groups findings and recommendations to HUD.

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  • 1 month later...

In typical govt. fashion, the feds have redacted that letter saying that they're essentially needing to re-think the logic of requiring all Consultants to provide proof of home inspector licensing.

Reasons for dropping the requirement:

1. Not all Consultants (or home inspectors) are required to be licensed home inspectors because there are exemptions for other professionals which allow them to practice inspection in their state, e.g. architects and engineers.

2. There may be education or apprenticeship requirements which can't be met prior to the 01.01.12 deadline.

3. There are many things a Consultant can do that don't required licensing: conduct a Feasibility Study, preparation of the Architectural Exhibit package, conduct a Plan Review, and conduct Draw inspections to name a few.

Here's the letter.

Download Attachment: icon_adobe.gif Redaction 11.17.11.pdf

75.2 KB

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In typical govt. fashion, the feds have redacted that letter saying that they're essentially needing to re-think the logic of requiring all Consultants to provide proof of home inspector licensing.

Reasons for dropping the requirement:

1. Not all Consultants (or home inspectors) are required to be licensed home inspectors because there are exemptions for other professionals which allow them to practice inspection in their state, e.g. architects and engineers.

2. There may be education or apprenticeship requirements which can't be met prior to the 01.01.12 deadline.

3. There are many things a Consultant can do that don't required licensing: conduct a Feasibility Study, preparation of the Architectural Exhibit package, conduct a Plan Review, and conduct Draw inspections to name a few.

Here's the letter.

Download Attachment: icon_adobe.gif Redaction 11.17.11.pdf

75.2?KB

I won't be paying my taxes this year. I've re-thought the requirements of the tax code and have come up with the following conclusions:

1. Not everyone in Oregon pays taxes because there are exemptions for them.

2. I might not be able to meet the financial tax committment by April 15th.

3. There are many income streams that aren't subject to taxation: welfare, food stamps, free condoms, etc.

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Hi,

It won't make a difference here. Our board has already taken the stand that any engineer or architect that is practicing home inspections is required to get a home inspector's license and we don't give two hoots whether they can't get the required education and take the test by the deadline, because some of the folks on those lists intentionally blew off the whole licensing process when they could have been grandfathered and then only began complaining when they realized they'd screwed themselves.

As for the draw inspections, cost estimates and that sort of thing, they can do that but that's the extent of it. If they do functional checks or anything approaching a home inspection they'd be breaking the law.

Randy, can you email me a copy of that notice? I can't seem to save it. I'll send a copy to Rhonda and she can put it on the agenda for the next meeting. I'm predicting that our board, through DOL, is going to send HUD a letter that essentially saying, "Nice try, but...."

Jim, I like the logic of that. Can you imagine the chaos if just 5% of Americans stood up all at one time and said the same thing and actually followed through on it? It would spread like a virus. It would probably paralyze the IRS. Hell, they have enough trouble trying to get up enough investigators and gather the evidence to deal with the rich tax cheats, they wouldn't know what the hell to do with that. If you think things in the other Washington are crazy now, imagine the mess that would cause.

ONE TEAM - ONE FIGHT!!!

Mike

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. . . Jim, I like the logic of that. Can you imagine the chaos if just 5% of Americans stood up all at one time and said the same thing and actually followed through on it? It would spread like a virus. It would probably paralyze the IRS. Hell, they have enough trouble trying to get up enough investigators and gather the evidence to deal with the rich tax cheats, they wouldn't know what the hell to do with that. If you think things in the other Washington are crazy now, imagine the mess that would cause. . .

Yes, by golly, that's it. In fact, I have an idea, let's "occupy" some parks and bring our message to the masses!

Let's see, where's I put my black beret . . .

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I chuckled when I read that letter. The obvious fix is for FHA to stop calling consultants "home inspectors", but what do I know?

Wouldn't work in Louisiana. Like Mike said for Washington state, it's based on the legal definition of 'Home Inspection'. If it meets the definition, it's got to meet the requirements.

Marc

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Hee, hee,

Good commentary in today's P.I. about Occupy Fatique by Michelle Broedour (SP). They've now taken over some poor guy's duplex that's for sale, smeared stupid color paint on it and are trashing the place. They say it's because there are too many homeless in a town with too many vacant houses for sale. Judging by the picture of the house I saw, the owner is probably one of the lower 20% and they've just bent him over a table and screwed him royally by making the place impossible to sell.

Still, who would want to miss a chance to royalty screw up the IRS's ding-bat system?

ONE TEAM - ONE FIGHT!!!

Mike

P.S.

If you can't find your beret, let me know; I've got a whole beret collection - German, Dutch, Brit, Swiss, American, Canadian - hell, I've even got a PLO beret that cost me an entire U.S. rucksack and frame.

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If you can't find your beret, let me know; I've got a whole beret collection - German, Dutch, Brit, Swiss, American, Canadian - hell, I've even got a PLO beret that cost me an entire U.S. rucksack and frame.

Interesting collection. I didn't know that the PLO used berets. I've only seen them wearing Keffiehs.

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If you can't find your beret, let me know; I've got a whole beret collection - German, Dutch, Brit, Swiss, American, Canadian - hell, I've even got a PLO beret that cost me an entire U.S. rucksack and frame.

Interesting collection. I didn't know that the PLO used berets. I've only seen them wearing Keffiehs.

Yeah, the beret is red. . There is a metal flash insignia on the beret made from what might have been a flattened out shell casing- a blue background with a white skull with a couple of crossed arab-type swords beneath it. A safety pin soldered to the back.

A Dutch soldier who'd been down there on a peacekeeping mission only agreed to swap it when I agreed to a spanking new American rucksack and frame. Cost me about $28 in 1985 if I'm remembering correctly.

ONE TEAM - ONE FIGHT!!!

Mike

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My take on the new HUD letter is that if your state requires you to have a license then you must have a license. Also, the letter sounds like HUD is just putting this matter to the side for the time or untill they can figure out another way to cull the list of 203k consultants.

If it quacks like a duck then it is a duck no matter what you call it! If you are doing 203k get the required license and go on with life if you are in a licensed state.

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. . . Also, the letter sounds like HUD is just putting this matter to the side for the time or untill they can figure out another way to cull the list of 203k consultants. . .

Why would they want to cull the list? Isn't it to their benefit, and the benefit of the public, to have a large list?

From my perspective and experiences, the 203k program is far at the bottom on anyone's list at HUD. The program is outdated and meaningful updates or revisions haven't been made in years.

The director for HUD is only an *acting* Director and I believe is one of those positions yet to be fulfilled by the Obama administration due to political divisiveness and none of his nominations are getting approved--or something like that.

Someone at FHA is making an attempt at doing some housekeeping. This is only the 2nd time I can recall in thirteen years that I've had to substantiate or "prove" my status.

There is no oversight or means of validating the quality or integrity of Consultants. And, believe me, there needs to be.

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. . . Also, the letter sounds like HUD is just putting this matter to the side for the time or untill they can figure out another way to cull the list of 203k consultants. . .

Why would they want to cull the list? Isn't it to their benefit, and the benefit of the public, to have a large list?

They have not maintained the list over the years. Just in my area they have three names of guys that have all passed away, one of them right after I moved to the state almost 6 years ago! The other two just over the past couple of years.

It seems they have no method of identifying active and non-active consultants. It use to be that if you did not show any activity over an 18 month period of time you were dropped off the list.

The whole 203k program is screwed up and needs to be revamped.

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  • 1 year later...

I'm glad to see you all talking about this subject but there are some issues I don't see mentioned so lets air them as well.

The HUD rule was backed off as it was clear the engineers and architects that are also 203k consultants felt they didn't need another license. I think HUD will exempt them at some point

I am not aware of any states that have developed a "standards of practice" for 203k consultants and until they do every inspection, ever report, every consultant would be in violation of the state licensing "standards of practice" every day. Oops.

Home inspectors typically "recommend that a licensed roofer look at a roof" if it appears shot... as a 203k consultant we don't recommend that a roofer looks at it instead we require it to be replaced or repaired and provide our estimate of that repair or replacement... oops, the state licensed HI's can't price out repairs or they could risk a fine. This is contrary to their "standards of practice.

The HUD rule wasn't thought out very thoroughly before they announced there ruling. The did, however realize they needed to do some additional homework on this BEFORE they can get this passed and didn't enforce it in the final hours before it was to be in effect.

It isn't about cleaning up the list so much because they would have lost the cream of the crop. I agree there are a few consultants that shouldn't be so some of that will happen as well and we'll hopefully get better inspectors if they are licensed where licenses are required.

More importantly I think they should be members of a home inspection group like ASHI, INTERNACHI, NAHI or something similar to maintain continuing education.

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