FHA 203k Contractor Directory & Certification Program
PURCHASE AND REHAB YOUR HOME WITH AN FHA 203k LOAN
Most home buyers are turned off at the sight or even the thought of a buying a fixer-upper, foreclosure, or an older home today. Educated and informed home buyers, on the other hand, are utilizing the FHA 203k loan to buy and renovate their new homes with little or no additional out-of-pocket expenses. In fact, the FHA 203k loan is a tool used by savvy home buyers and home owners, successful contractors, real estate and mortgage professionals since 1978.
An FHA 203k loan is very similar to the traditional FHA loan. The main difference is that with the FHA 203k loan, the borrower is adding money to their mortgage loan to finance any repair/improvement costs. Whereas the traditional mortgages require the property to meet certain condition requirements before the loan is funded, the FHA 203k loan allows the borrower to purchase/refinance their home and complete the repairs/improvements after the transaction closes. With the FHA 203k loan, a borrower can repair/improve his/her home without worry about the additional out-of-pocket expenses for the repairs/improvements.
The Standard 203k allows for complex rehab such as structural modifications, additions, landscaping, architectural/engineering drawings, and requires the use of a HUD approved FHA 203k Consultant. The renovation cost for the Standard 203k is $5,000 - FHA mortgage limit for the area in which the property is located (up to $1.4Million – some restrictions apply). Click Here to access the maximum FHA mortgage limits for all areas.
The Limited 203k version, on the other hand, is intended for uncomplicated and more simple rehab and will not allow for structural modifications, landscaping, etc. The renovation cost for the Limited 203k are $0 - $35,000 (some restrictions apply).
203k Benefits to Buyers/Borrowers
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203k Benefits to Homeowners & Sellers
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203k Benefits to Realtors® & Lenders
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Through the 203k Contractor Certification Program, contractors receive education on the 203k to help them better understand the complex nature of the FHA 203k Loan, such as HUD/FHA guidelines, paperwork, time lines, compensation structure, lender overlays, processes, eligible and ineligible items of the 203k. This education is required in order to earn the designation as a Certified 203k Contractor®. To verify their 203k Contractor Certification status, contractors will be listed here in the 203k Contractor Directory.
Until 1995, HUD maintained a database of HUD approved builders. Since disbanding that approval status in 1995 (ML 95-97), HUD/FHA no longer certifies, approves or endorses contractors/builders, including those who want to do work under the 203k program. Instead HUD/FHA allows the borrower to hire whomever they want and requires the lender making the loan to determine that the borrower's selected contractor is "acceptable" to do the work by verifying the contractor's references, credentials, work experience, education and understanding of the 203k. Because lenders do not have an education program for contractors on the 203k loan, contractors complete the 203k Contractor Certification Program to receive the 203k education needed and get listed in the 203k Contractor Directory as the method of validating their understanding, experience, and competency in the FHA 203k loan program. The Certified 203k Contractors® listed here on the 203k Contractor Directory have completed the 203k Contractor Certification Program, which means they know the guidelines, paperwork, time lines, compensation structure, lender overlays, necessary steps, recommended processes, eligible and ineligible items, as well as roles of the various participants (lender, 203k consultant, Realtor® and consumer) with the FHA 203k loan.
To learn more about the FHA 203k loan program, please review the information below and on the FAQ page. For more detailed assistance, please proceed to the Contact page.