203K Loan
I’m currently in the process of completing a project with a 203K loan. I’m set to move into my house at the end of December and feel great about the overall results. This is an overwhelming process (203K) and I’d be willing to help anyone with and input that is needed. Also, using DAF Contracting…
I’m currently in the process of completing a project with a 203K loan. I’m set to move into my house at the end of December and feel great about the overall results. This is an overwhelming process (203K) and I’d be willing to help anyone with and input that is needed.
Also, using DAF Contracting has been a lifesaver with this type of loan. I’d be happy to refer anyone to them if needed.
@cbarm – can you shoot me an email? i have some questions.
guikazoid at hotmail dot com
I spoke to several FHA consultants and was told I might need to do lead paint abatement but they couldnt define which methods would qualify, they had requirements for adding kitchen cabinets (I have a very old fashioned original kitchen that I didnt want to change), and DIY work would delay the payouts to the contractors if not complete as they explained it. The reqs seemed geared to protecting low income renters from deadbeat landlords who wanted to cut corners. It sounded like the FHA guidelines would dictate what could be done, not what I wanted to do with my house. And a lot of those requirements seemed incompatible with preservation. I was more concerned about the FHA consultant they make you hire and their control of the payments to the contractor than finding a contractor would could deal with it. The consultants I spoke with (and I spoke to everyone in the NYC area who would return my call) kept saying things like “I’ll come over and tell you what you need to do.” I didn’t like the idea of having a third party controlling the process and telling me how I could renovate my own property (above and beyond DOB and LPC requirements).
For those recommending contractors for me: thanks but my project is already successfully completed. I was just curious.
I worked with Barry Koven at Wells Fargo and Keith Arthur is my consultant. Excellent folks. Anyone wanting to talk with DAF Contracting can call 516-870-2677. I’ll try to post some pictures when the work is done. This is actually one of the properties that has been featured on brownstoner already!
The FHA inspector will go into the property and assess what needs to be done based on your ideas. He then takes the loan amount and compiles a budget that will be used to fund each stage of construction. The BIG difference between this loan and a more conventional loan is that the contractor assumes costs up front instead of starting with an immediate cash flow. This immediately eliminates 80% of potential contractors (the reason I mentioned DAF Contracting in the original post). You definitely want to go with someone that has worked with this loan type before. That will help eliminate a lot of the frustration.
Your question about doing a high quality restoration and doing some of the work yourself should be and is completely up to you. You can do anything you want with the loan. Just work with the FHA consultant and make sure it’s defined up front. This will help a tremendous amount. Doing some of the work yourself should be in writing with your contractor before any work begins.
The hard part about all of this is getting the loan. Once you have that it’s all down hill from there!
BHS the contractor I used to renovate my bath and some other small items around my home is an expert in 203k’s. They know the process inside out and upside down. I’ve referred him to 2 friends and they both raved about how easy he made the process. His name is Constantine from Bullfrog Builders. You can reach him at 718-228-0199. Good luck.
The 203k can be a wonderful loan if you have the right people in the right places. Who was you Consultant and Lender.
Garrett@the203kconnection.com
The FHA inspector will go into the house and assess what needs to be done based on your ideas. He then takes the loan amount and compiles a budget that will be used to fund each stage of the construction project. The BIG difference between this loan and a more conventional loan is that the contractor assumes costs up front instead of starting with a cash flow. This immediately eliminates %80 of your potential contractors (the reason I mentioned DAF Contracting). You definitely want to go with someone that has worked with this loan type before. That will help eliminate a lot of the frustration.
Your question about doing a high quality restoration and doing some of the work yourself should and is completely up to you. You can do anything you want with the loan funds. Just work with the FHA consultant and make sure it’s defined up front. That helps a tremendous amount. Doing some of the work yourself should be in writing with your contractor before the work begins.
The hard part about all of this is getting the loan. Once you have that it’s all down hill from there!
I know there are a lot of people who are considering going down this path…could you describe what the process was like for you in terms of the construction portion and what if any special requirements the FHA had for the restoration/renovation work you did (lead abatement, cabinets in the kitchen, etc)? I could not get a black and white answer on what would be required from the lender, the FHA, or various consultants, which suggested to me that it was somewhat subjective, poorly defined, or that the people I was speaking with didnt have experience with my type of project (preserving original details, fairly high-end restoration, some DIY). Wanting to do some of the work DIY seemed to throw a wrench in things since it might take me far longer to finish than the work I hired out but would hold up payments to contractors.