Eugene Loan Guy

Next in our series about buying a foreclosure using the FHA 203k Streamline Rehab loan has to do with selecting a contractor. So far, you have gotten pre-approved for a loan in a specific price range and you have developed a rapport with the Realtor® that is going to make sure you get the proper guidance and support you need. Now, let’s talk about the next very important thing you need to do, selecting the contractor or contractors for your rehab process. This is a very important aspect of your Oregon FHA 203K loan. There are things that you need to look for in the right FHA 203K contractor as they can mean the difference in a successful or unsuccessful FHA 203K renovation.

The Streamline process does not require a general contractor, but may require two or three specialized contractors like roofers or plumbers or electricians. It is your choice who you use for these jobs and you only need one bid, but the underwriter will determine if they think the bid is either too high or too low and request additional bids in that situation.

1.) Are They Properly Licensed & Insured? — To complete a FHA 203K renovation in Oregon most contractors MUST be licensed by the state. There are exceptions, but very few. You can verify their licensing via the Construction Contractor’s Board (CCB) website. If they aren’t listed then they need to be replaced. If contractors have not met the licensing guidelines, not only will your FHA 203K contractor have a tough time pulling permits, but you loan likely will not make it through underwriting in the first place.

2.) Do They Have References? — We check 2 references for each of your FHA 203K Contractors. All we need is a name and phone number of the reference.

3.) Do They Have a Line of Credit? — We don’t require that your FHA 203K contractors have a line of credit but it makes it easier for them to begin work immediately after closing without having to wait for the first draw. The easiest way to avoid any delays is to make sure they can start work immediately and can pay for it by using their line of credit.

Contractors can be one of the biggest issues with your Oregon FHA 203K loan. Since we are FHA 203K experts we want to make the renovation as painless and profitable as possible (and FASTER to CLOSE as well!). For more information on FHA 203K Loans give us a call at 541-342-7576 and we’ll be more than happy to guide you through the process. Whether it be a renovation of that fantastic foreclosure deal or upgrading your current residence, we can help!

4 Responses to “Buying a Foreclosure – choosing a contractor for the repairs!”