Contractor selection is one of the most important aspects of your California 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.
1.) Are They Properly Licensed & Insured? — To complete a FHA 203K renovation in California the contractor MUST be licensed by the state. You can verify their licensing via the Contractors State License Board website. If they aren’t listed then they need to be replaced. California has strict rules on contractor licensing. If contractors have not met these 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. Don’t be fooled by tax certificates and county business licenses, for your California FHA 203K loan these are not sufficient.
2.) Do They Have References? — We check multiple references for contractors doing work for us. We suggest you do the same & find out what past customers have to say about the quality of the work along with how fast they completed it.
3.) Do They Have a Line of Credit? — The reason you want FHA 203K contractors to have a line of credit is so they can begin work immediately after closing without having to wait for the first draw. While some lenders will allow for disbursements at close for upfront costs incurred by the contractors others will not. 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 California FHA 203K loan. Whether it be a renovation of that fantastic foreclosure deal or upgrading your current residence, Singer Construction can help!
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