Notification of Conditions for contractors working with the 203k Loan Program
The following is an outline of the basic requirements and conditions for contractors who wish to submit bids for and participate in the rehab loan activities of borrowers who are using or plan to use the FHA 203k Rehab Loan Program (or similar escrow based rehab funding projects). By your acceptance of these terms and conditions you agree to honor all the below stated condition and will maintain your ability to qualify for this program for each project you access and/or submit a bid to the consultant or client thru the Genesis Rehab Reporting System.
All contractors seeking to be selected for a 203k Rehab Loan Project will do or have the following:
· Current qualifications/licensing to performing contracting activities in the municipality for which the project exists
o All contractors involved in communities/municipalities where at least 50% of the housing stock is built prior to 1979 will have completed the EPA Lead Safe Practices Certification requirements as defined at www.leadcertification.com/(your state’s two letter abbreviation)
o All insurance requirements as necessary for legal business practices in the municipality (including but not limited to General Liability Insurance and Works Compensation Insurance if applicable)
· Adequate credit/background qualifications to successfully complete all lender validation requirements.
o Contractor will supply all requested documentation in a timely and expedited manner so as not to in any way jeopardize the ability of the borrower to complete the mortgage financing process
All contractors seeking to be accepted as winning bidder on a 203k Rehab Loan Program specific project agree to the following:
· All funds released will be based upon the Work Write Up (WWU)/Specification Of Repairs completed and signed by all partied prior to the close of escrow.
· No up-front funds of any kind will be disbursed to the contractor for start up costs
· All funds for work completed will be disbursed following an inspection and written report created by a qualified representative of FHA/Lending Institution (otherwise known as Draw Inspection).
· All permits as required on the Permits and Certification Form (included in the WWU) will be provided to the FHA consultant or other representative of FHA/Lending Institution prior to the first Draw Inspection.
· Rehab activities (including meeting with borrower, obtaining permits and start of work) will begin no later than 7 days from the close of escrow or when written notification of that closing has been received by contractor.
· The first Draw Inspection will be requested no later than 30 days from the close of escrow.
· All requests for addition funds as required due to changes in the scope of work (Change Orders) will be submitted to the FHA Consultant for prior approval of the Lender before work is to begin on these change order items.
· All disbursements will be less a 10% hold-back. This hold-back will be released by the Lender up to 30 days following the submission of the Final Draw Request.
· All disbursements will be payable in a multi-party check with all borrowers and the contractor of record listed on the payment, and requiring endorsement by all.
In addition to the above conditions for participation in the various contractor bidding opportunities, you agree to the Terms of Service for use of the Genesis203.net Rehab Reporting System. These terms of service are available for view at the bottom of all pages of the Genesis203k.net website.