FHA 203K Renovation Loans -- Choosing Your Contractor

Contractor selection is absolutely vital to a successful 203K loan process. I recommend at least three bids for 203K financing. Here's what to look for when selecting your 203K contractor:

Are They Properly Licensed ?

To complete a FHA 203K renovation in Georgia the contractor MUST be licensed by the state. You can verify their licensing via the Secretary of State's website. If they aren't listed then they need to be replaced. Georgia has strict new rules on contractor licensing that went into effect July 1st, 2008. If contractors have not met these licensing guidelines, not only will your 203K contractor have a tough time pulling permits, but you loan likely will not make it through underwriting in the first place. Don't be fooled by tax certificates and county business licenses, for your FHA 203K loan these are not sufficient. Alabama, Tennessee, Florida, Maryland, North Carolina, South Carolina, Virginia and most other states also have similar licensing requirements. Individual state licensing requirements are generally posted on the Secretary of State's website for your specific state.

Are They Properly Insured?

They should have at least $1,000,000 in general liability and meet any other requirements required by the state in which you are doing your 203K financing.

Do They Have References?

You should check at LEAST 3 references before allowing contractors to work on your 203K projects. We suggest you do the same & find out what past customers have to say about the quality of the work along with how fast they completed it. We also require 3 banking references to find out...

Do They Have a Line of Credit?

The reason we want our FHA 203K contractors to have a line of credit is so they can begin work immediately after closing without having to wait for the first draw. While some lenders will allow for disbursements at close for upfront costs incurred by the contractors, others will not. In some cases it can take 3 weeks to get that first draw. The easiest way to avoid any delays is to make sure they can start work immediately and can pay for it by using their line of credit.

Contractors can be one of the biggest issues with your FHA 203K loan in the hands of a loan officer inexperienced with the product. Since we are FHA 203K experts and close multiple FHA Renovation Loans in Georgia, Florida, Alabama, Tennessee and Virginia every month we have experience in dealing with and choosing the right contractors. We got our experience the hard way and have seen nearly every contractor trick in the book (to the good contractors out there don't take offense, I love you). For more information on FHA 203K Loans give us a call at 404-551-3845 and we'll be more than happy to guide you through the process. Whether it be a renovation of that fantastic foreclosure deal down the street or upgrading your current residence, we can help!

Jonathan Blackwell

404-551-3845

EMAIL

Green Renovation Lending & Advice

Serving: Atlanta | Birmingham | Jacksonville | Nashville | Savannah | Orlando | Miami | Tampa | Mobile | Huntsville | Montgomery | Knoxville | Richmond | Tallahasse | Macon | Memphis | Norfolk | Arlington | Newport News | Macon | Warner Robbins | Auburn | Athens | St. Augustine

Alabama | Georgia | Florida | Tennessee | North Carolina | South Carolina | Virginia | Maryland | Washington DC | Illinios | Hawaii | California |