Kelly Nguyen, Home Buyer in San Jose, CA

203K contractors

Asked by Kelly Nguyen, San Jose, CA Tue Jul 10, 2012

I have an older home in west SJ and want to refi to FHA 203K loan so that I can add sq. footage to the house. My question is 2 parts:

*Do I have to use a special 203K contractor?
*What is the general process for using the 203?

Help the community by answering this question:


Dana Lindberg’s answer
It is good to use a licensed and experienced 203k contractor. This ensures that your work conforms with the 203k guidelines.

For more details about 203k loan, visit CFS Mortgage and RenovationReady brings together more than 50 years of traditional and renovation lending know-how. Let their team of experts help you.

Dana Lindberg
CFS Mortgage -
0 votes Thank Flag Link Sun Sep 15, 2013

Congratulations on your decision to pursue 203K financing to enhance your property. The 203K is a wonderful mortgage product that can effectively improve your home and build equity in the process.

While I agree that the 203K loan is similar to other FHA loans from a qualifying perspective; I think the differences are far greater on every other level. First, every few lenders are proficient in executing the process all the way through the draw process. Two, there are even fewer mortgage professional who are thoroughly educated in the process. Third, success in working with the program depends entirely upon educating and counseling the borrower so you completely understand the process and can manage the expections of completing your project with minimal stress or down time.

No, you do not have to work with a special contractor. As a lender, I do not choose or direct you to a specific contractor. However, I would encourage you to determine if the contractors you are interviewing have experience working with the 203K.

Since you are planning on adding an addition to your home, you will be financing a full 203K (Streamline 203K's are limited in scope of work to 35k and under AND no structural improvements). Working with a full 203K will require you to work with a FHA consultant also, I recommend consulting with the FHA consultant prior to meeting with contractors, There are many reasons for this; but the most important is that the FHA consultant will first provide you information about what you must do, in lieu of putting the wish list in the forefront.

I have written several blogs about the 203K program that I would be happy to forward the links for your further research. I am the Certified 203K consultant for my company and am completely passionate about the program. Please contact me with any questions...large or small. Best of luck!
2 votes Thank Flag Link Tue Jul 10, 2012
I usually try and do things on my own, but this is one case when I think a contractor is really as important as you say they are. An addition to a home is no small undertaking. It's well-worth your time to find a licensed, insured contractor.
Flag Wed Feb 25, 2015

It's best to use a contractor with 203k-experience or who has been 203k educated.
There is a National Directory of these contractors at These contractors have had their extensive 203k experience verified or have completed a comprehensive 203k education course. Contractors listed in the directory are called Certified 203k Contractors because of the validation and education they must complete.
Web Reference:
1 vote Thank Flag Link Wed Jul 25, 2012
The 203K will require that you use a licensed contractor. You can check any contractor's license status at this link:…
The contractor will most likely have his own workers to do the job so it is prudent to also verify the contractor has worker's compensation insurance in full force and effect.
1 vote Thank Flag Link Tue Jul 10, 2012

It first depends on whether you need more than $35,000 from the loan for repairs. If less, then their are no special requirements. If more, and you are referring to the contractor who does the work, you can use any contractor who has not been barred from receiving money from a government entity. These are rare and you would not want to use one anyway. Such contractors appear on a black list that the bank will check when you are submitting the loan application.

I would be delighted to assist you with your application and submit the application to our underwriters so you can get a loan. Please call me at 408-639-0211 or email me at

Mitchell Pearce
High Tech Lending
1 vote Thank Flag Link Tue Jul 10, 2012
There is no special "203k contractor" you have to use although HUD does require the contractor to be licensed and insured per your state's requirements and the lender will "approve" the contractor. Each contractor submits a copy of their license, insurance (including workman's compensation) along with references, a W-9 and contractor homeowner agreement for the lender to review before final approval.

I can send you some information about the process if you email me a request, but in general you would apply and qualify for the 203k like any other FHA loan as an owner occupant. Once you have selected the house you want to buy (or refinance), you would need to get a HUD 203k Consultant to do a site inspection, review your plans and prepare a Specification of Repairs (if the repairs are expected to cost more than $30,000).

Once you have this Specification of Repairs, you get contractor bids, select a contractor then submit the contractor agreement and the 203k Specifications packaged prepared by your HUD 203k Consultant - to your lender for processing and underwriting.

It is important to have a Consultant and a Lender who are experienced and who specialize in this loan in order to maximize the service you receive and the success of your project.

Feel free to contact me if you have any further questions or if you need a referral in your area.

Best wishes!

Vito Simone
HUD 203k Consultant
0 votes Thank Flag Link Mon Jul 16, 2012
The answer to the first part is that you don't need a special contractor.

The second part is that the 203k is similar to a standard loan with the exception of the repairs / renovation process which your lender will walk you through and will need your involvement.

Feel free to use the reference links for more info.

Best of luck...
0 votes Thank Flag Link Tue Jul 10, 2012
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