Bed Stuy Reno: First 203K Inspection


    From the contractor’s perspective, the 203K inspection is probably the single most important part of the 203K process. The contractor doesn’t get paid for his work until an inspection actually takes place.

    But let’s take a step back. The 203K inspection is the official FHA inspection of the property, and it can only be done by the 203K consultant. When applying for the 203K loan, you are required to select a consultant. Based on budget and the scope of work, the consultant determines the number of “draws.” Draws are the total number of payments and inspections.

    My project has a total of five draws. I selected my consultant based on the feedback I got on Brownstoner Forum last year. My consultant has been great and even gave tips to make the process go more smoothly.

    When to schedule a draw? How it works is that your contractor will complain to you about how he’s low on cash and then you will tell him he needs to finish more stuff before you call the consultant. (I’m only slightly joking about this.) Prior to the first inspection, I had absolutely no idea what to expect.

    I frantically emailed Pamela from the blog So We’re Buying a House! and asked a million questions, such as “do I have to fill out this crazy FHA form?” Pamela patiently answered all my questions by telling me not to worry about the inspection, and that the consultant will complete all the forms and he will determine the percentage of work completed.

    The day of the consultant’s visit my contractor actually cleaned up! Cleaning is not his strong point but I was impressed that there were no longer paint cans and equipment just laying around. (Above, one of the kitchens about four or five weeks into construction. It looks totally different now.)

    The consultant came and took lots of photos of all the work and asked the contractor questions. The entire process took about 30 to 45 minutes. A day or two later the consultant sent me and the contractor the official report reflecting the amount of work completed to date and the amount the contractor is to be paid by the bank.  The owner and the contractor both have to sign the form. The form is then sent to the bank by the consultant, and like magic a check arrives that you and the contractor both sign.

    And all is well for a couple weeks until your contractor starts complaining about getting paid again. Next up: How to find a contractor for a 203K renovation.

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