Licensed & Insured

MD MHIC#128053
203k Certified Annually

Experienced

We have over 35 years in new construction & remodeling.

ADA

We offer remodeling services that meet ADA standards for freedom of those aging in place.

Service

Based in Carroll County and surrounding areas, including: Frederick, Howard, Montgomery, & Baltimore.

The Importance of Hiring a 203k Certified Contractor

Are you considering buying a fixer-upper under a 203k program? This is a great way to get a good deal on a house with huge potential and renovate it with little to no out-of-pocket expenses. Once you decide on the property and get approved for the loan, you will need to find a reliable Carroll County remodeling contractor to perform the planned renovations. Choosing the right contractor is crucial for the success of your endeavor. Not only should you be looking for an experienced and customer-oriented person, but also someone who is intimately familiar with the 203k process.

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203k Provisions Regarding Contractor Use

The 203k loan program is administered by the Federal Housing Administration (FHA), which is a part of the Department of Housing and Urban Development (HUD). Both organizations have a say in what kind of renovations you can or should perform under a 203k loan. However, neither FHA nor HUD certifies or endorses remodeling and general contractors. If you come across a contractor advertising themselves as FHA-certified or HUD-recommended, stay away, as these are false claims.

In fact, 203k loan has rather lax regulations regarding contractor use. Even you could perform the work yourself if you are appropriately licensed and skilled and can finish in a timely manner. In most cases, however, contractor selection is subject to lender’s final approval.

What is a Certified 203k Contractor?

To help contractors stay up to date on the intricacies of the 203k process, an independent certification program was established. Upon completion of this 203k Contractor Certification Program, a contractor gains an understanding of the FHA 203k loan and has to pass a test to obtain the certificate. This educational program helps contractors gain knowledge and experience in such areas as:

  • HUD’s guidelines for 203k remodeling
  • Required paperwork and timelines for filing
  • Compensation structure
  • Bidding and estimation

The 203k Certification also involves a pre-approval process, where a contractor has to submit proper licensing and insurance information, as well as professional references for verification. Due to this involved background check, certified 203K contractors are typically preferred by the lenders.

Why Hire a 203k Certified Contractor?

While you can hire whomever you want, it’s worth choosing a contractor that went through the 203k Certification Program. Because the 203k process has it’s own quirks and requires working with a lender, unprepared and inexperienced contractors risk jeopardizing the entire project. For example, it’s essential for the bids and estimates to be as accurate as possible. Underbidding to get the projects may lead to quickly blowing through the contingency budget and running out of funds. Also, your contractor should be prepared to start and sustain the work without an initial deposit, because he is only getting paid by the lender for completed work.

Have we convinced you to choose a certified contractor to transform your fixer-upper? If so, please consider Dun-Rite Contractors for your 203k renovation project. Contact us if you have any questions!

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