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The FHA 203K Loan

Purchase or refinance a home and finance improvements

Standard HUD Consulting Fees

For Full 203k loans, HUD requires the use of a qualified HUD Consultant. The HUD Consultant charges a consulting fee which is set by HUD based upon the amount of money needed for renovations.

Here is the standard HUD Consultant Fee Schedule:

 

Minimum and up to $7500 in repairs..............................................$400

$7,500 to $15,000.............................................................................$500

$15,001 to $30,000...........................................................................$600

$30,001 to $50,000..........................................................................$700

$50,001 to $75,000..........................................................................$800

$75,001 to $100,000........................................................................$900

Over $100,000...............................................................................$1,000

 

The HUD Consultant's fee can generally be financed as part of the renovation account with a Full FHA 203k Loan, However, most consultants prefer to be paid at the time service is provided. Included in the HUD Consulting fee is:

  • Complete oversight of renovation project from start to finish
  • Initial meeting with borrower and property inspection
  • Determination of repairs required by HUD to bring property up to FHA minimum standards
  • Discussion of additional repairs not required by HUD but desired by borrower
  • Consultant will prepare all required documentation required for loan, including architectural exhibits, feasibility study, and the specification of repairs.

Specification of Repairs

There are 35 areas defined by FHA the specification of repairs must include with a cost breakdown separated  by the cost of materials and labor. It must include the Consultant's recommended contingency reserve amount and the number of recommended inspections.

If the borrower is performing some of the work (see 'self help'), the labor costs cannot be eliminated from the estimates, however, the borrower will not be allowed to be paid for his or her own labor.

The Work Write-up