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Home Repair Remodeling Basements

Tackling major repairs and renovation on 1st home

3 years ago

We purchased our first home in 2016 and are ready to tackle some big projects. We've gotten quotes for a new roof (~$15K) and complete basement waterproofing (~$23K), both from companies we'd like to work with. We're also considering screening in our large covered patio and maybe doing a some minor cosmetic changes to a few rooms. We're considering an FHA 203K renovation refinance, but are uncertain how the requirement to hire one general contractor will impact our ability to go with the roofer and basement company we hope to work with based on our extensive research and/or previous experience with the roofing company for minor things.

We're hoping to get insight into how much control we'd keep over picking the subcontractors if we go this route and advice for what to look for in a general contractor. Thanks!

Featured Answer

landzllc

3 years ago

I spoke with a contractor yesterday and asked about using my college friend who has his own HVAC company. He said he would use him if I wanted (the house needs some HVAC work).
Where are you in the 203k process, if you went that route?

Comments (6)

Louise Smith
3 years ago
Are you referring to the HUD consultants? I found no requirement that only one contractor be engaged. Have you spoken with the bank or the HUD consultant? You can get the names of HUD consultants at https://entp.hud.gov/idapp/html/f17cnsltdata.cfm

https://www.nerdwallet.com/blog/mortgages/fha-203k-renovation-loan/

https://www.investopedia.com/terms/f/fha-203k-loan.asp

https://www.hud.gov/program_offices/housing/sfh/203k
Basil
Original Author
3 years ago
Thanks, @Louise Smith. I was basing it off of this information from Nerdwallet.com about the refinance options via the Standard 203(k):

Standard 203(k)
- Covers structural improvements (room additions, replacing faulty plumbing or electrical systems, etc.).
- Has no price cap, but projects must total $5,000 or more to be eligible.
- Requires project completion within six months of closing.
- Limits work to a single general contractor, who must hire and pay subcontractors.
- Requires inspections on all work regardless of cost.
Nerd note: The FHA has set mortgage limits for borrowers based on median sale prices for a given area. Check the current FHA loan limits to determine the maximum amount you might qualify for in your area.
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Louise Smith
3 years ago
last modified: 3 years ago
The limited 203(k) allows for multiple contractors. Regardless, I would speak with the lender.

Limited 203(k)
- Provides up to $35,000 with no minimum cost requirement.
- Lends itself to aesthetic, uncomplicated repairs or upgrades (new countertops, bathroom remodel, new flooring).
- Allows flexibility for borrowers to choose different contractors for different projects.
- Requires project completion within 60 days of the loan’s closing date.
- No inspections are required for projects totaling less than $15,000.
Basil thanked Louise Smith
Basil
Original Author
3 years ago
@landzllc, many of the lenders we spoke to weren't processing 203k loans early last month due to the COVID-19 pandemic. We were seeking it only for renovations and not for purchase + renovations, but several said we should check back later in the summer or early fall to see if they're willing to process those loans again.

Did you encounter any barriers due to the pandemic?
landzllc
3 years ago
It’s slow going. I was told I would be receiving paperwork to fill out. I called a couple days later and she says we need to send them bids, contractor W9s, etc etc.

The house is lived in, the sellers are divorcing and they are less than cordial to us, even during the inspection. I don’t want that hassle.
Basil thanked landzllc

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