Become a HUD 203(k) Consultant

by Nick Gromicko, CMI®

A 203(k) consultant is a professional who is responsible for advising clients on the complicated 203(k) process. They make sure the required paperwork is filled out and filed correctly so that homeowners can obtain a 203(k) loan. Many 203(k) consultants are inspectors who wish to widen the scope of their business. Inspectors already have much of the knowledge and training required to become a 203(k) consultant. More details about becoming a 203K Consultant. 

The 203(k) program was created in 1961 as a way to obtain money to complete necessary repairs and to refinance or purchase a home. The program’s complexity prevented it from being used effectively until 1994 when consultants were first introduced to the field. In order to become an approved 203(k) consultant, applicants must be approved by the U.S. Department of Housing and Urban Development (HUD). Approved candidates are placed on the Federal Housing Administration’s 203(k) Consultant Roster, which guarantees that the consultant has met the qualifications as prescribed by the FHA.

How to Become an Approved 203(k) Consultant

The following five requirements must be met and submitted in resume or list format for consideration by HUD:

1. a minimum of three years' experience as a remodeling contractor, general contractor or home inspector. InterNACHI can provide a certificate of membership to prove experience. A state license as a state-certified engineer or architect may also be submitted in lieu of the documentation of the three years' experience;
2. education. InterNACHI applicants have access to and may submit their InterNACHI Continuing Education transcripts. Members can also round out their education with InterNACHI's online and online video training courses (each provides a Certificate of Completion);
3. state licensing (general contractor, home inspector, etc.). In those states where a home inspector is required to be licensed, the Department requires that the applicant be licensed and be able to provide proof of such licensing;
4. a narrative description of the current/prospective consultant's ability to perform home inspections, prepare architectural drawings, use proper methods of cost-estimating, and complete draw inspections; and
5. the applicant must also submit to a local Homeownership Center proof of certification verifying that the consultant has read and fully understands the requirements of HUD Handbook 4240.4, REV 2 (203(k)) Handbook and all related materials listed in Mortgagee Letter 2000-25.

An individual who submits an incomplete application package will receive a letter indicating the information required to cure the deficiency. This letter will give the individual 15 days to correct them. If the response does not satisfy the outstanding requirement in its entirety and within the prescribed deadline, the individual must wait an additional 90 days prior to re-applying.

Each applicant who meets the 203(k) program requirements will be issued a participation letter. This letter will contain the consultant's name, business address, and a consultant identification number. This number will be needed by the consultant prior to doing any work associated with any 203(k) loan. This consultant identification number will be used to assist HUD in evaluating the work of consultants. Mortgagees must enter the consultant's identification number on the insurance application screen and will not be able to process 203(k) cases without it.

Where should the applications be sent?

Applications should be sent to the Homeownership Center (HOC) that serves the region in which he/she will be conducting business. There are four HOCs in the U.S., each of which corresponds to nearby states and territories. Applications must be sent through regular mail as email will not be accepted. The HOCs are listed, along with their addresses and the states they serve, as follows:

• Philadelphia:
  
  U.S. Department of Housing and Urban Development
  Philadelphia Homeownership Center
  The Wanamaker Building
  100 Penn Square East
  Philadelphia, PA  19107-3389

Serves:  Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia and West Virginia.

• Denver: 

U.S. Department of Housing and Urban Development
Denver Homeownership Center
UMB Plaza Building
1670 Broadway
Denver, CO  80202-4801

Serves:  Arkansas, Colorado, Iowa, Kansas, Louisiana, Missouri, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Wisconsin, Wyoming and Utah.

• Santa Ana, California:

U.S. Department of Housing and Urban Development
Santa Ana Homeownership Center
Santa Ana Federal Building
34 Civic Center Plaza, Room 7015
Santa Ana, CA  92701-4003

Serves:  Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Washington, American Samoa, Guam, and the Commonwealth of the Northern Marianas.

• Atlanta:

U.S. Department of Housing and Urban Development
Atlanta Homeownership Center
Five Points Plaza
40 Marietta Street
Atlanta, GA  30303-2806

Serves:  Alabama, Florida, Georgia, Kentucky, Illinois, Indiana, Mississippi, North Carolina, South Carolina, Tennessee, and the Caribbean.