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Posted by Mike Young on July 1, 2021 at 8:17 PM under
0 comments
when do we get paid for a change order?
Change orders are paid once the work has been completed 100%. You must first approve the work to be completed by change order and some lenders want you, as a consultant, to make that call, others want to do it for you.Then chastise you for not getting the paperwork signed prior to submitting for that approval. You can't. You should authorize the contractor to make the change then once the work has been completed 100% you submit the signed paperwork. There is no "up front" money for change orders.
Mike Young, 203k Team Leader

We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on August 10, 2017 at 9:59 AM under
0 comments
203k Software for consultant and contractors
I get such a kick out of seeing new consultants who come on strong with their new software... only to find out they are paying per write up for the use of that software. The minute they fall behind on a montly installment they are out of business.
We believe that when you purchase a software license you should have free use of that software to do as many projects as you like as long as you have that software in service.
There is little more satsifying than helping new consultants get it right. Too bad they had to start off with a "per use" product that is difficult to navigatge. Let us know when you are ready to try a better solution to your 203k write ups.
Mike Young, 203k Team Leader

We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young Team on June 12, 2016 at 12:15 PM under
0 comments
Standard 203(k) Financeable Repair and Improvement Costs and Fees
The HUD guideline allows a consultant to charge what is common and typical for that service area FOR THAT CONSULTANT.
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.
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
Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on May 10, 2016 at 6:17 PM under
0 comments
How many draws are allowed on a 203k loan?
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 $1,500 each to write five checks. Of course it doesn't make any sense at all.
ADDED 5/7/2021 - Handbook 4000.1 - So, if you have a loan and the contractor fails to draw enough money with the first five draws leaving a balance in the construction loan... example, say they have $25,000 and they haven't finished the work. Choices are 1) foreclose on the home, no one wants that, 2) authorize another draw, and additional draws as necessary to complete the project... of course. When the guideline says "no more than five draws will be allowed" they mean to say "no more than five draws will be allowed to be financed into the loan." Additional draws may be paid with a change order authorizing funds from the contingency reserve to be used, or the fee can be paid in cash at the time of that draw. Either way is acceptable. I don't, however, recommend, taking a check as I one crooked client provide me with a check which she promptly stopped payment on.
Mike Young Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on March 4, 2016 at 3:08 PM under
0 comments
Studs with notches rendering them useless
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!

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, 203k Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on February 3, 2016 at 9:07 AM under
1 comment
Make more money consulting
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
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Posted by Mike Young on December 6, 2015 at 8:45 AM under
0 comments
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 Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on November 25, 2015 at 12:58 PM under
0 comments
FHA 203k Contingency reserve
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 Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on November 24, 2015 at 9:05 PM under
0 comments
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 Mike@my203kconsultant.com
Mike Young Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on October 15, 2015 at 8:18 AM under
0 comments
Sat in on a seminar yesterday... lets clear the air
I heard another person (consultant) telling clients they get $1250 for a 203k and you can get it all reimbursed in the loan back to the client. This simply NOT true, sorry, but the only fee that is reimburseable per the guideline is the consultation fee and feasibility report, NOT a separate home inspection fee. READ the guideline and you will see that a consulation includes a "203k property inspection". If you charged the client for a home inspection too then you should also provide a full home inspection report of quite a number of pages, if so 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, then 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. I dissagree. I am an engineer or architect, I can be a consultant therefore they are clearly wrong.
Mike Young Team Leader 
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
  
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Posted by Mike Young on October 9, 2015 at 9:13 AM under
0 comments
Lender requires consultant to buill for draw inspections
Lenders constantly throw up the guideline when they think they are right... then when they are wrong they still want it their way and they call it an "overlay" and it typically causes delay.
Well as far as us billing for a draw payment, they need to ready ML 94-11
9. REVISION TO THE DRAW REQUEST FORM. Effective for mortgages closed on or after May 1, 1994, the new Form HUD 9746-A in Attachment 3 must be used on all draw requests. The Compliance Inspection
Report (Form HUD 92051) is no longer required to be submitted with the Draw Request form; however, the back side of the draw request form has been revised to include an Inspection Report that must be
completed by the fee or staff inspector on each inspection of the property during the rehabilitation period. The cost of the inspection will also be included on the back side of the form; therefore, the fee inspector
will no longer need to bill the lender for the inspection fee. The inspection report must be completed for the fee to be paid by the lender.
It appears since 1994 it hasn't been required for us to bill this separately.
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