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Remodel/Renovation Consultant's Duties & Fees
THE FHA CONSULTANT
Responsibility: The home inspection and completion of the work write-up and cost estimate are essential elements in processing the Remodel/Renovation insured loan, in addition to the underwriting steps applicable to a regular mortgage. Therefore, when a consultant is used, it is the responsibility of the consultant, as well as the local HUD Office and the lender to assure that the architectural exhibits are properly prepared. Mortgagee Letter 94-11 explains the role of consultants to borrowers under the Remodel/Renovation program. Each HUD Office must assure that the consultants and plan reviewers are properly trained. On a representative sampling, a consultant's work write-ups and cost estimates are to be desk reviewed by the HUD Office; a field review may also be necessary. Results of the reviews should be forwarded to the consultants, plans reviewers and lenders. These reviews are also integral parts of the annual re-certification sessions for consultants, plans reviewers, and inspectors.
When acceptable by the local HUD Office, the consultant can also perform inspections during the construction period.
Qualifications: HUD requires at least three years experience as a remodeling contractor, general contractor or home inspector in order to quality as a Remodel/Renovation consultant. The consultant must be able to perform home inspections, prepare the necessary architectural exhibits, and be able to complete the draw inspections on the property during the construction phase of the project. A state licensed architect or engineer may also be accepted. To apply for HUD acceptance, the consultant must submit his or her qualifications (resume') to the local HUD Office and be trained.
If additional services are required of a state licensed architect or engineer, then the fee is not restricted by the above schedule and can be included in the mortgage as a cost of rehabilitation, provided the fee is customary and reasonable for the type of project being
proposed.
Fees charged by consultants: The fee charged by the consultant can be included in the mortgage as a part of the cost of rehabilitation. The consultant must enter into a written agreement with the borrower that completely explains what services will be rendered and the fee charged. Neither HUD nor the lender will be responsible to the consultant for fees owed by the borrower.
$7,500 or less - $400
$7,501 to $15,000 - $500
$15,001 to $30,000 - $600
$30,001 to $50,000 - $700
$50,001 to $75,000 - $800
$75,001 to $100,000 - $900
NOTES $100,001 and Above $1,000
Each Additional Unit $25
Feasibility Study $100
An additional fee of $25 can be charged for each additional unit in the property under the same PHA case number. For this fee, the consultant inspects the property and provides all required architectural exhibits.
In some cases, the borrower will request a feasibility study by a consultant prior to submitting a sales contract to a seller. An additional fee of $100-200 can be included in the mortgage for this type of service. Basically, the consultant will do a quick home inspection of the property, with a "rough estimate" of the work that will be necessary to comply with HUD's requirements. Maximum fees for compliance inspections on completed work will continue to be set by each HUD Office. |
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