What is the biggest problem with a Streamlined 203k?

The biggest problem is getting a contractor out to bid the job in a timely manner.

In 2005 the FHA came out with the Streamlined k loan program. Light work, but included roofing, updating of bathrooms and kitchen, flooring, paint, etc, just no structural issues. It took off like a lightning bolt. Now, six years later there is allot of talk about lowering the construction amount to $10,000 (nothing formal as yet). This is being considered as too many of the Streamlined k loans are going south.

It sounds easy, just get a couple contractor bids and close the loan... lol. NOT quite. There is no oversight that there is enough money in the bid to do the job. If the contractors fail to bid on a repair like a cracked window or grading that is needed the loan then flips to a full 203k loan and mandatory repairs have to be added to the scope of work.

Lets get back to the biggest problem... getting a contractor or two out in a timely manner to get that bid ceated. How can you improve the time it takes to close a Streamlined k loan?

Simply have a consultant involved. Consutlants have a list of contractors who are likey already validated by the lender, they put the "scope of work" together so the contractors are bidding the same list, and they bid the job much faster than a contractor... this is what we do.

Advantage is that you get a bid in to the lender much faster, you get that compliance inspection so there will be no conditions by the appraiser that force this loan to the Full 203k realm. Your loan closes faster, smoother, and we guarantee you that the contractor's bid will follow close behind.