Personal and professional finances

The Role of the Renovation Consultant

FHA 203k & Homestyle Consultant

  • The key role of FHA 203k & Homestyle Consultant is to do a full inspection of the subject home;
  • Their job is to check especially for any safety and health related problems and/or issues that are part of the rehab project;
  • The Consultant is also called the HUD consultant, who are experts in their field;
  • They are professionals with experience and knowledge on all aspects of home improvements.


What Does HUD Consultants Do For Homeowners

Here is the role of FHA 203k & Homestyle Consultant:

  • The role of FHA 203k & Homestyle Consultant is to perform a Feasibility Study on scope of work
  • The Consultant will also be required to perform a Property Inspection Report on the subject property
  • Borrowers will be consulting with the Consultant on the scope of work to be performed
  • The Consultant will do a work write-up
  • They will be responsible for either doing the architectural sketch or subcontracting such work
  • Consultants will be responsible for inspecting the job prior to contractor’s draws, deny a draw request until further work is done
  • They are also responsible for doing a final inspection before a final contractor’s draw
  • The Consultant will also be responsible for making sure that the contractor and sub-contractors submit lien waivers
  • All materials and labor are paid so there are no mechanics liens on the property
  • The Consultant is the quarterback between the homeowner, the general contractors, and lenders
  • The Consultant is responsible for the work to be done correctly, timely, and professionally
  • The role of FHA 203k & Homestyle Consultant is to make sure that the construction funds are properly spent on the project
  • Their role is to protect borrowers and lenders interests

Developmental Phase

  1. Buyer/Borrower works with real estate agent to select a property and secure a ratified contract. If uncertain of the repair cost, we can assist you in determining the mandatory repair costs. We offer a Pre-off Feasibility Study to evaluate the property and provide repair costs.
  2. Schedule on-site meeting and property evaluation. Contact The Mortgage Link Inc. team to setup a meeting at the property to evaluate condition of the property with one of our consultants.
  3. Consultant performs the Initial Property Assessment/Feasibility Analysis. This on-site inspection is not a full home inspection but includes many of the areas normally evaluated during a home inspection. This inspection is designed to identify all HUD mandatory repairs and estimated costs. The Mortgage Link Inc. renovation consultant is also a licensed home inspector and can perform a combination of home inspection and 203k inspection. Doing both together will save the buyer money on inspections.
  4. Consultant develops the specification of repair (SOR) (work write-up) in the HUD approved format.This SOR includes all the renovations and repairs that will be completed within scope of the loan. The consultant will include cost breakdowns for all the designated work.
  5. The Consultant is required to review all required architectural exhibits the project will need. These may include drawings, mold tests, termite inspection, structural engineer report and any other required inspections needed prior to settlement.
  6. Buyer/Borrower receives and reviews the SOR and BOR. After review, the Borrower will coordinate with properly licensed contractor(s) to visit the property and BOR. Contractor will complete the required BOR that includes cost of each line item showing both materials and labor cost for each.
  7. Buyer/Borrower reviews the contractor proposals and selects the contractor to perform the required work.The final BOR is submitted to The Mortgage Link Inc. and our partner consultant.
  8. 203k Consultant will review the contractor BOR’s and update the draft SOR. The final SOR with other required 203k documents will be sent to our team and the Buyer/Borrower. Upon receipt of the final SOR we will order an formal appraisal of the property. The appraisal will be based on the after repaired market value or the properly.
  9. Upon final appraisal and underwriting approval the settlement will occur.


Construction Phase

  1. After settlements Contractor begins work with 30 days. There are no advance funds or deposits given to the contractor at this time.
  2. Upon completion of designated work defined in the SOR, the contractor can request funds (Draws) to be released. At this point we  meet and develop the 203k Draw Request forms per HUD guidelines. After agreement for funds to be released, our partner consultants should be contacted to schedule a site draw inspection. The signed draw request should be sent to the Consultant prior to the site inspection.
  3. Our partner consultant will perform the site inspection reviewing the work completed and finish sign off on requested funds.The Consultant will send the signed draw paperwork with accompanying pictures to us for the next step. We will withhold 10% of each draw amount request until the end of the project. This is required by HUD 203k guidelines.
  4. Any deviation from the SOR will require a change order. The partner Contractor will develop the changes which needs to be approved by the Borrower, Consultant and The Mortgage Link Inc. prior to work being done.
  5. Upon successful completion of work and final inspections the repair escrow and renovation project will be closed out.Any remaining funds left in the escrow will be put on the principle of the loan.