203K, Contractor Draws, Receipts

Asked by Anson Bowden, 32246 Thu Oct 22, 2009

What is required from the Contractor when Draw Requests are submitted? Is the Draw Request form the only thing that needs to be submitted? Just trying to understand things a bit.

Thanks

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Michael Ofsanik’s answer
Michael Ofsa…, Other Pro, Grayslake, IL
Thu Oct 22, 2009
As a Draw Inspector I can tell you that different lenders require different things. The one's I've worked for require an inspection, which you pay for, every time a Draw for more money is requested. There can be anywhere from 3-5 draws, I charge $100 each.

The inspection requires a walk-through of the property along with documentation (draw request form or equivilant) & 15+ photos showing percentages of work being completed at every draw. Before the final or closing draw is released all work must be 100% complete. Also, at each draw an estimation of the dollar amount of the repairs is given. If work was intended in the beginning but plans changed and the work wasn't done you don't get the money alotted for that project. Such as reusing cabinets instead of buying new ones. If unforseen work is needed a Work Change Order can be requested by the contractor. There is also a 10% hold back in case the project runs over budget.
1 vote
Charles Chor…, Agent, Orange Park, FL
Thu Oct 22, 2009
Hi Anson,

Check out this web site from FHA info: http://www.fhainfo.com/fha203k4.htm , it should be able to answer your questions about the 203K.

All the best
Charlie Chorman
571-1358
yourrealtor@att.net
Web Reference:  http://jaxhomesinfo.com
0 votes
Frank & Shar…, Agent, Fleming Island, FL
Thu Oct 22, 2009
Anson, this is a great question. I am going to listen in and see what others post. I can tell you from the experience of an agent in our office, that you want to be sure there is accountability with the contractor and that if the bank is supposed to verify that the work has been done, they do so. Also, I would require that you and the contractor's names be on the draws (if FHA permits that) so the contractor can't get a draw without your knowledge.
Web Reference:  http://teamalters.com
0 votes
Jan Ostler-W…, Agent, Atlantic Beach, FL
Thu Oct 22, 2009
The loan officer should be able to answer that question for you. The contractor has to be approved by the lender which probably involves showing licensure, etc. Hope that helps.

Good luck,

Jan Ostler-Walker, GRI
Prudential Network Realty
375 Atlantic Blvd. #1
Atlantic Beach,FL 32233
WEB: jostlerwalker.prudentialnetworkrealty.com
Email: jan.ostler@prudentialnetworkrealty.com
0 votes
Sam Thompson, Mortgage Broker Or Lender, Alpharetta, GA
Thu Oct 22, 2009
It would be a good idea to provide an invoice and receipts, but the actual requirement varies from lender to lender....Wells Fargo assigns a real person in the draw dept. to communicate directly with the borrower. Wells is great at this part of the process and has a devoted draw dept. to make the transaction run as smooth as possible.
0 votes
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