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Listing all posts with label 203k Consultant Fees. Show all posts.
  1. The HUD guideline allows a consultant to charge what is common and typical for that service area.
     
    There seems to be some confusion on this issue as when the so called "new guideline" and that is all it is, a guideline, when it came out it hadn't fully addressed our draw inspection fees. There are several other issues that we'll talk about in the next couple of weeks to help you see some other major flaws in the "new guideline" that just came out too soon, they hadn't taken the time, though they had plenty of time, to complete their work.
     
    The guideline actually states that on going draw inspections can be financed and can be whatever the typical and normal fee is for the area.


    Specifically from the guideline as follows: Page 355 if you want to look it up.
     

    D) Standard 203(k) Financeable Repair and Improvement Costs and Fees


    The following repair and improvement costs and fees may be financed:
    · costs of construction, repairs and rehabilitation;
    · architectural/engineering professional fees;
    · the 203(k) Consultant fee subject to the limits in the 203(k) Consultant Fee
    Schedule section;
    · inspection fees performed during the construction period, provided the fees are reasonable and customary for the area;
    · title update fees;
    · permits; and
    · a Feasibility Study, when necessary to determine if the rehabilitation is feasible.

    >END<

    All of our fees are published and have been for years. These are our typical and normal fees for all areas throughout the USA where we deliver these services. In an effort to be consistent.  Our published fee - click here
  2. This has been misread for long enough - we are not held to only 5 draws

    4240.4 REV-2 (5-2.C.) 2) Intermediate draws (four maximum) are inspected by the HUD assigned fee (or DE staff, where applicable) inspector (see paragraph 4-9).

    If the cost of rehabilitation exceeds $10,000, then additional draw inspections are authorized provided the lender and borrower agree in writing, and the number of draw inspections are shown on Form HUD 92700, 203(k) Maximum Mortgage Worksheet.

    Even HUD is guilty of misinterpretation of this. Now we have lenders who think on large projects there are only 5 draws allowed, 

    I just received an accounting from a lender who charged $250 x 5 title update fees... they missed this in the guideliine

    4240.4 REV-2
    (1-13.)
    E. Title Update Fee. To protect the validity of the mortgage position from mechanics liens on the property, reasonable fees charged by a title company may be included as an allowable cost of rehabilitation. Where the mortgage position is protected and is not in jeopardy, this fee may not apply. Borrowers may wish to obtain lien protection, but the fees must be paid by the borrower where such lien protection is not required to ensure the validity of the security instrument (see paragraph 1-20). The allowable fee should not exceed $50.00 per draw release. If all draw inspections are not made, monies left in escrow must be applied to reduce the mortgage balance.

    Supplimental origination fee - The lenders get this fee and it is a minimum of $350 or 1.5% of the construction cost.  They think this fee is for writing 5 checks, and they are willing to take $70 per check, that seems reasonable to me... how about you?  But, watch what happens when the project is $500,000 in construction... they get 1.5% and they seem to think it is for writing those same five checks. They don't seem to understand this is to manage the additional draw inspections. Why would it make sense to pay them $1500 each to write five checks.  Of course it doesn't make any sense at all.

  3. Studs with notches rendering them useless

    A stud is supposed to be a 2 x 4??

    This is what we found when the wall was opened. This has been supporting the house in part for nearly sixty years. LOL 2 x 4" studs on 24" centers then you just notch them out as you need to make the plumbing fit.... NOT!




    203k project - notch just in case you need one later... LOL
    Maybe you might need a notch sometime in the 
    future, just notch it out and save it till you need it.
    This is at a door way where today you would see
    a doubled up 2 x 4" stud since it is a doorway.













    Mike Young Team
  4. Join us this Saturday at 10:30 am PST or the following Saturday at the same time, it will be... 

    The best $49.00 you'll spend this year

    Make more money consulting using the knowledge you already have from your 203k consultant training. Provided you have been trained correctly. This webinar will show you how to take the knowledge you already have consulting and turn it into another profit center. You will see what you have to do to get your inspection fees up under the current "Guideline" restrictions but more than that you will see another way to use your skills to make more money that you ever thought was possible. 

    The best $49.00 you'll spend this year


  5. How to make money consulting in spite of the HUD Guideline

    That's right. HUD in its infinite wisdom has come out with what was touted as the "new guideline" while in actuality it was not new at all with regards to 203k consultants. In fact it took us back to re-enforce the 1994 fee levels. An outrage for many of us as you can imagine. They don't go a year without an increase in their wages and expect us to go back 21 years for ours. 

    We have worked hard, building our businesses and when all other fees were deregulated in 2011 we took that as a good thing, though it turns out it was deregulated for all but our fees. Now a compliance inspector can get $450 to make a 2 minute inspection to see if a broken window has been fixed or not but we are expected to take $100 and look at how a home is put together. Is that window properly flashed, sealed, etc, on top of the broken glass repaired.  On top of that they now have dumped change orders on us and took it away from the lender… except some lenders want to “okay the CO prior to commencing the work” like they ever did that in the first place. Most didn’t, most rely on us in the field to make that decision for them.

    There has been lots of talk on the internet and blogs about how many of you are planning to get out of the business as you can’t possibly do a draw inspection for $100. You are absolutely correct. No one can and make any money at it.

    Join us for a 1-hour webinar and we’ll show you what you need to do to make money in this business in-spite of the Guideline. Yea, you gotta pay to see the solution, You will see how you can increase your profits substantially over the consulting work you have been doing provided you have been consulting properly... some of you aren't and weren't. The fee to attend this 1-hour session is only $49 and may run over with Q&A session.
     
    We’ll show you how to take your knowledge as a 203k consultant and turn it into a profit center for your business like you won’t believe till you see it, and no more draw inspections unless you want them.


    Learn how to make more money than the HUD Guideline suggests and increase your inspection fees legally in this 1-hour webinar. There is only room for the 1st 100 signing up in this first session, so sign up early. We will have additional events as the demand suggests.
    The webinar will show you how to make even more money than HUD pays. I just did one for another client that HUD would pay $1,000 and my fee was $5,500. Doing my second one this coming Saturday where my fee will be $7,500 or close to it. Still based on the construction amount. It is set up for December 28th 2015, 8-9 am PST. This will be the best $49.00 you spend this year and will get your new year off to a running start. Click here to sign up
    There is only room for the 1st hundred who sign up, others will have to wait for a future event.

    Be sure to send us an email to be notified of the next presentation

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  6. We just had a lender ask us to increase the contingency based on all these fees that didn't used to be allowed. Interesting that they want to increase their security and though the borrowers quite often want to keep the loan as low as possible, now they are going to have another 10-20% on fees that many lenders demand we get to the penny. Some lenders like M&T even have a form they want us to fill out with the exact amounts of all permits... nice, and impossible to get eactly unless we submit the plans in many cases and we don't have those plans just yet since the client hasn't paid the architect to draw them till they own the house. You have to laugh at some of these things. But this is a new one. Read carefully as it also states it is up to the lender to require a contingency at all or not, so for this one (not M&T) to actually want them higher than they have been is likely just so they make their loan amount a little bigger for their company.

    II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages 8. Programs and Products - 203(k) Rehabilitation Mortgage Insurance Program

    Handbook 4000.1 362 Effective Date: 09/14/2015 | Last Revised: 09/30/2015 *Refer to the online version of SF Handbook 4000.1 for specific sections’ effective dates
    Limited 203(k) Financeable Contingency Reserves (E)
    A Contingency Reserve is not mandated; however, at the Mortgagee’s discretion, a Contingency Reserve account may be established and may be financed. The Contingency Reserve account may not exceed 20 percent of the Financeable Repair and Improvement Costs.
    The Borrower may provide their own funds to establish the Contingency Reserves. Where the Borrower has provided their own funds for Contingency Reserves, they must be noted under a separate category in the Repair Escrow Account.
     
     
    Standard 203(k) Financeable Repair and Improvement Costs and Fees (D)
    The following repair and improvement costs and fees may be financed:
    · costs of construction, repairs and rehabilitation;
    · architectural/engineering professional fees;
    · the 203(k) Consultant fee subject to the limits in the 203(k) Consultant Fee Schedule section;
    · inspection fees performed during the construction period, provided the fees are reasonable and customary for the area;
    · title update fees;
    · permits; and
    · a Feasibility Study, when necessary to determine if the rehabilitation is feasible.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  7. There has been allot of uproar since HUD published their "updated guideline" on 14 Sep 2015. Our fees haven't been addressed yet so they have been reinforced as the 1994 guideline which has been in effect since 1994. Outrages as they deregulated all other inspection fees in 2009 or 2011. In fact most of us old timers started charging higher inspection fees with that deregulation. 

    Consultants all over the USA have been charging from $100 who adheared to the 1994 guideline up to $400 + mileage from a survey we did with existing consultants who do more then one or two per year. The good news is that the local HOC's have been given the authority to adjust our fees to whatever is reasonable and typical for your area but YOU need to communicate with them and I recommend you do it through us. If you have been charging more than $100 per draw, please send me an email and let me know what your reasonable and typical draw fee is at your earliest convenience. 

    Understand we are not trying to tell you what to charge, we do need to know what you charge so we can make a concerted effort to get control of this fee schedule sooner rather than later. Please email us at HUDFEES@my203kconsultant.com

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  8. I heard another person telling clients they get $1250 for a 203k and you can get it all reimbursed in the loan back to the client. NOT true, sorry, but the only fee that is reimburseable per the guideline is the consultation fee and feasibility. NOT a separate home inspection fee. READ the guideline and you will see that a consulation includes a "203k home inspection". If you charged a home inspection fee then you can get your full consultation fee. A feasibility cannot or at least should not be charged unless you provide a feasibility report as well and most of the time you do not.

    If you charge separately for a full home inspection and deliver one, they you are entitled to be paid for your service but NOT from the 203k escrow, that would be against the guideline. I received a call from a HOC the other day where I was told we cannot sell any ansilary products as it would be a conflict of interest.  No termite report, no engineering report, no architectural services, yet we all have been doing all of the above as needed to get the job done faster. 
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