Home buyers planning on securing HomeStyle or Choicer financing must work closely with the HUD Consultant to coordinate the various steps involved throughout the process.
If the residential property being considered for purchase by the buyer is in need of repairs and the scope of the work to be done exceeds the HomeStyle or Choicer $25,000 threshold, then the following essential steps involves the involvement of a HUD Approved Consultant. Should the work amount not exceed the $25,000 threshold, then a Consultant is not necessary.
Initial Site Visit
The Consultant is completely independent in this transaction. We often refer a local Consultant listed on the HUD consultant roster where you can schedule an appointment for the site visit. The entire list of approved HUD Consultants listed by state can be accessed through the HUD website.
Upon visiting the site, the consultant will perform a thorough examination of the property and provides with an assessment about the project's feasibility under the HomeStyle or Choicer loan requirements. If the consultant determines that the project is indeed feasible, a formal agreement called the Specification Of Repair (SOR) is signed and the buyer pays a retainer fee. The exact fee to be paid depends on the cost of the proposed repair work. The HUD stipulated fee amounts to be paid to the consultant can be figured out using the general fee schedule which is found on the HUD website as well.
Architectural Exhibits, Detailed Work Write-up and Cost Estimates
Based on the initial site visit and inputs from buyer regarding their renovation plans, the HUD Consultant will prepare a concise document regarding the project's scope and specifications. Architectural exhibits along with a detailed cost breakdown for each of the repair tasks will also be included. Additionally, the HUD Consultant will also prepare lender packages and contractor bid packages that contain everything mentioned above. Finally, draw request forms based on the work plan to be followed will be prepared.
Once the detailed work write-up is completed, a copy of the complete package with all the required documents is submitted to the lender, contractor and the borrower.
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