Qualifying For A HUD 203(K)


To qualify for Department of Housing and Urban Development rehabilitation program, an FHA approved 203(k) consultant must take a look at the home and work up estimates for repairs and improvements. This person must have more qualifications than an ordinary home inspector, and must be on the approved list. According to the HUD website, here are the qualifications that HUD looks for in an approved consultant:


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He or she must have at least three years of experience as a contractor or home inspector, or must have an engineering or architectural license from the state. Each state has its own requirements for licensing.

Education in contracting, remodeling, home inspection, or a related field. Many years of experience may be substituted for a degree, and licensing also qualifies the person has having an education in the field.

If the person does business in a state that requires licensing, those documents must be up to date with the state’s department of oversight.

The ability to prepare architectural drawings and to use cost estimating software or similar methods to prepare a realistic cost worksheet. These worksheets are prepared by the inspector and included with the 203(k) mortgage application.

As for now, HUD does not have an exam in place that these inspectors must pass in order to be licensed 203(k) inspectors, but they are planning on implementing a test in the future.

When a consultant is approved, he or she gets a participation letter which acts as proof that the application has been accepted and the inspector is able to perform 203(k) home inspections. Ask to see this letter because you must enter the consultant’s identification number on your loan application. You may also check the inspector’s credentials through the 203(k) consultant roster search database, available through HUD’s Homes and Communities website.

An approved 203(k) consultant will be periodically reviewed by HUD to ensure that work estimates are up to standard and adequately prepared. These reviews don’t typically affect homeowners, but occasionally a HUD inspector may want to take a look at the property in question. These inspections are not the same as “draw” inspections, which are usually performed by the approved 203(k) consultant  before you authorize payment to any contractor performing your remodeling work.

You may hire the initial consultant as your general contractor though it is not required under HUD (Department of Housing and Urban Development) rules.

Gina Wilson

Another post from Gina Wilson – Credit & Loans Specialist Blogger.

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