Contractors and the 203k loan program

I must get 5-6 calls per week from contractors who have found out something about the FHA 203k loan program who confess after a while that they are small contractors and really don't have the wherewith-all to finance their jobs.

Do not dispair, the Streamlined k is just what the doctor ordered for you. This loan program provides 35-50% of the money up front for you to purchase materials. The drawback is that you only get one final draw upon completion. That is enough for most and gets you started. How many projets an you get under way with 35-50% of the money up front?

Why do I say 35-50% of the money?... The program allows up to 50% per the HUD guideline but the lenders who fund these loans all have their own rules or supplimental guidelines. Wells Fargo Home Mortgage funds 35%, Prospect Mortgage 40%, and Bank of America 50%. Who do you want to work for knowing this?

Wells Fargo typically pays the contractor about 3 days after getting the request for payment, Prospect Mortgage takes about 5 days and Bank of America about 7 days. Now who do you want to work for?

Knowing in advance means everything. You need to know your product and what to expect so there are no surprises. By the way, the business is very busy right now, if you aren't, you could be. M