Rehab Your Dream Home the Way You Want It!!!
Contract with Beryl as your Limited 203k Inspector and Limited 203k Consultant
Have you been passing up buying homes that require cosmetic repairs for lack of funds to fix them up? FHA has a program for you. Not to be confused with FHA’s much more complicated Full 203K program, a Streamlined 203K loan eliminates much of the paperwork and simplifies the process to obtain rehab funds.
You don’t have to be turned off by fixer uppers or overwhelmed by the work required to bring some homes up to today’s standards. You don’t have to go it alone. That is where Beryl’s Limited 203k Inspectors come in to the picture.
What is a Limited 203K Loan?
It used to be that you bought a home and then applied for a home equity loan to fix the home up. This approach resulted in two loans. However, many lenders won’t make rehab loans at closing if there is no equity.
The answer was the Limited 203K Loan, which is figured into the original loan balance. Now you have just one loan. This Streamlined 203k Loan can be an adjustable-rate or fixed-rate mortgage. The mortgage balance of a 203k Loan can exceed the purchase price of the property.
Feasibility Analysis Report by Beryl’s Streamlined 203k Inspector
For home buyers looking for financing through a Limited 203k loan, a Feasibility Analysis Report serves one specific purpose: This report helps you make a quick decision regarding the cost involved in renovating the property to meet the HUD minimum property standards. This Feasibility Analysis Report by Beryl’s Streamlined 203k Inspector is one of the initial steps in the process.
A number of important and essential details regarding a property in need of repair work is provided in Beryl’s Limited 203k Consultant’s Feasibility Analysis Report. The scope and the extent of the rehabilitation is clearly documented in the report along with the cost of repairs. Costs are separated into three categories, Mandatory, Recommended, and Desired. We meet you at the property for this inspection, and walk you through the HUD 4240.4 Rev-2 Checklist.
A seller may also be more willing to negotiate and adjust their sales price according to the findings from a Beryl Limited 203k Feasibility Analysis Report. Most prudent sellers will realize that they cannot sell their property if it doesn’t meet the minimum property standards set by HUD and will adjust their selling price accordingly.
Performance Specifications and Scope of Work Packages by Beryl’s Limited 203k Inspector
The Limited 203K loan allows for simple repairs that can be easily estimated and completed. Many are considered light cosmetic repairs, but some will require hiring a licensed Contractor. Knowing about the tasks and the scope of the needed work in renovating a residential property can help you proactively seek competitive bids from contractors to complete the repair work.
Beryl’s Limited 203k Inspector provides you a detailed Performance Specifications and Scope of Work package that informs the Contractors what needs to be done to the property and asks them to price their services out by Labor and Materials. Below is an approved list of repairs / improvements from HUD:
- Roofs, gutters and downspouts
- HVAC systems (heating, venting and air conditioning)
- Plumbing and electrical
- Minor kitchen and bath remodels
- Flooring: carpet, tile, wood, etc
- Interior and exterior painting
- New windows and doors
- Weather stripping & insulation
- Improvements for persons with disabilities
- Energy efficient improvements
- Stabilizing or removing lead-based paint
- Decks, patios, porches
- Basement completion and waterproofing
- Septic or well systems
- Purchase of new kitchen appliances or washer / dryer
You select the Contractor
While Beryl’s Limited 203k Inspectors have contacts with several vetted Contractors available for you, you ultimately select the contractor. Beryl’s Limited 203k Inspector is willing to assist you in reviewing the bids submitted by renovation contractors.
If you’re considering a contractor which has not yet been approved by your lender or has never done a Limited 203k rehabilitation, it is important that they are informed early on about the Limited 203k rehabilitation concept as it applies to contractors.
Disbursement of Payments for a Limited 203k Loan
There is a maximum of two payments to each contractor or “self-help” plan. The first Limited 203k payment is 50% in advance. However, a self-help” allowances does not include labor, only materials costs. The final Streamlined 203k payment is paid after submission of evidence of payment to sub-contractors / suppliers or other possible lien claimants.
Don’t Go with a Free Estimate from a Contractor
Quite often, one may consider just calling up a contractor and getting a free estimate regarding the repair work. This may be a reasonable option if the contractor is known to be trustworthy and has worked with you in the past. If that doesn’t happen to be case, do not opt for this. You will usually get what you pay for and since you are getting it for free, it may not be worth all that much.
As the contractors are motivated to earn your business, they may initially present a proposal with a lower cost estimate than the real amount necessary to finish the work. The real cost and addition repair work may be revealed to you after you have already come to an agreement and the contractor has already begun work.
Then you will have to come up with money out of your own pocket instead of utilizing the Limited 203k loan. This kind of behavior is widely prevalent and the only way to avoid falling into this common trap is to seek an independent and honest feasibility analysis report from a Beryl Limited 203k Inspector.