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Finding a General Contractor to renovate your property using the FHA Renovation Loan Program may be time-consuming and frustrating. Most General Contractors, Handy- men, and Re-modelers don't know how the renovation loan works. Some lenders will may provide a list of contractors to borrowers; they can then interview and select a contractor. The borrower is not required to use any Contractor on the list. Some Lenders may require you to get more than one contractor bid for the file. It is my opinion that when Lenders make this a requirement, they are not familiar with the FHA Renovation Loan Program. As the borrower, it is your decision which contractor you select therefore it should not matter how many bids are in the file. There are some Lenders that will require you to use the Contractor they select or they may tell you that you must use a Contractor from one of the national home improvement stores. If this is a requirement from the lender and not FHA, my suggestion is to run as fast as you can if this is told to you. It is a conflict of interest for the lender to require you to work with the contractor of their choice. It can be considered steering and steering is a federal violation. If you decide you want a contractor from one of the national home improvement stores, that is fine; but you need to understand the cost of your job is going to increase. These stores do not have contractors on staff they will sub the work out to one of the many contractors that buy supplies in their store. The store must get paid and the contractor must get paid and you will be paying both. Some contractors are very good with their hands and do outstanding work, but they don't know how to complete a detailed work-write up. FHA requires that the contractor break out the cost of the repairs by line item and some are just not able to do that. If you find that the contractor is taking too much time to complete the work-write up then that is the first sign that you may want to find another contractor. Once you receive the work-write up from the contractor, you want to review the figures. It is amazing that some contractors cannot do simple math. If you spend too much time correcting the contractor's mathematical errors, it is time to find another contractor. The author is a well Known Real estate Developer & having immense interest and knowledge in FHA 203k Renovation Contractor, property management, FHA 203k Renovation Contractor Cleveland, Remodeling Contractor, & much more hence also called to be as Property Guru.
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