A 203k consultant (or an architect, or home inspector) is needed to prepare the work write-up and cost estimate on a owner-occupied residential property to be renovated using a 203k rehab loan.
All the proposed improvements on a property using 203k financing must comply with HUD’s minimum property standards and all local codes and ordinances. A borrower should employ a qualified architect or 203k consultant to prepare a proposal that clearly shows the scope, type and cost of the rehab work to be executed.
The following list of exhibits are recommended to be included as a part of the report by a 203k consultant.
In projects where a new addition is being made to an existing structure, the consultant report must have a plot plan of the site.
If any structural changes are involved, then the proposed interior plan is also needed.
The work write-up and cost estimate can be in any format as long as the quantity and the cost of each item is shown. A detailed description of each item is also required where necessary.
The 203k consultant should give a clear cost estimate regarding the amount of material and labor sufficient for a contractor to complete the renovation work.
Even in situations where the borrower decides to complete the proposed work by themselves, the cost estimate for labor must still be included. This is done to ensure that there are sufficient funds available to finish the necessary work by another contractor, if the borrower fails to complete the work.
The consultant must visit the property and inspect it to make sure that the property is free from dry rots, termites and other infestations. The 203k consultant needs to ensure that there aren’t any defects that can be hazardous to the safety and health of the occupants. The roofing, plumbing, electrical, heating and structural systems have to be property inspected to determine their adequacy. The need for upgrading of thermal protection also has to be determined.