FHA 203k Certified Contractors – where do I find one?

The Search Begins…..

Finding a certified FHA 203k contractor can be a hard thing to come by- why you ask?  Simple- FHA / HUD does not maintain a database, train contractors, or even approve them to do work.  Finding a contractor to use in the FHA 203k renovation mortgage process is the responsibility of the home owner or purchaser.  This can be a daunting task as many contractors do not understand the process- how to start, paper work involved and how to create the bid, working with the HUD consultant, even understanding how they get paid.  So then how is a customer, who is also new to the 203k supposed to find a contractor?

Certified203kLogo

The Contractor Directory for FHA 203k Loans at www.203kcontractors.com is a great place to start.  This is a directory that has a criteria and process for which contractors can get educated about the 203k and how they can implement it as a financing source for clients.  I personally work with contractors who have successfully navigated the program and certification because it gives these contractors a foundation to succeed using the 203k.  To quote there website:

“Through the 203k Contractor Certification Program, contractors receive education on the 203k to help them better understand the complexities, guidelines, paperwork, time lines, compensation structure, lender overlays, necessary and recommended processes, eligible and ineligible items in addition to roles of the various participants (lender, consultant, Realtor®, and consumer) in 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, should display the Certified 203k Contractor logo and you can also request to see a copy of their Certificate of Approval.”

Do all contractor’s need this certification?

Now do all contractors have to go this route to do the FHA 203k program– ABSOLUTELY NOT.  Any contractor is able to work with the program as long as the lender they are working with has approved them.  I am simply using this blog to explain to you, the consumer, that my experience has been good using certified contractors who have gone through this program.  At AnnieMac we have worked with hundreds of contractors and many have not been certified and we have had good experiences.  So if you are considering a FHA 203k mortgage then know that any contractor, as long as they are well funded can do 203k transactions.

What is needed for contractors to work within the FHA 203k Program?

  • Contractors must fill out a Contractor Profile Package which includes an application
  • All applicable state and local licenses and insurances
  • Lead based paint certification
  • Contractor must sign a Home Owner Contractor Agreement
  • Contractor acknowledgement form explaining the types of 203k loans

Otherwise it just comes down to having the expectations set for the contractor as to what the time frames are so that we are all on the same page.

Why would a contractor want to do FHA 203k Loans?

FHA 203k loans can be a great resource for contractors and if they do the work in a workman like manner than it can be a good revenue stream for them as well.  The monies to be paid to the contractor are set into an escrow account and are paid as the work is complete- so its a simple equation:

Do good, quality work + Follow the 203k guidelines = Get Paid

If you have a contractor that you would like to use the FHA 203k program feel free to have them reach out to us and we will explain the program in detail and get them setup.  Also please have them reach out to the Contractor Directory at 1-855-CALL-203k (1-855-225-5203).

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