Need a contract with general contractor when doing 203k?

Question

I have a house under contract (Lakeland, FL) that has an attached MIL suite/efficiency apartment.  I plan on renting the apt to offset the mortgage.

The place needed a little work (fix up one room, new floors, putting in whole new kitchen), so I got an FHA 203k loan - streamlined version.  We have the home under contract for $205,000 and are going to put about $28,000 into it with the 203k.

I have a general contractor lined up who has already walked through it and submitted quotes to the bank for me.  I've signed about a thousand docs with the bank, but I was wondering...

Do I need to have a separate contract between just me and the contractor?  Or is his contract with the bank enough?

I'll admit, I need to go back and comb through some of the language on all of the 203k loan docs that I and he have signed so to see what his obligations are, but thought someone here might have experience in this area that they could share.

Many thanks!

David

David Young · Answer

@Adrian Smude - awesome.  Just checked out your profile.  Looks like you are up to some great stuff.

After we get this one settled, I'm hoping to land 1 or 2 multifamilies in 2017.  Will likely look for a 4-plex first, then hopefully something a little bigger on the next one.

Richard Leyba tejada - thanks for getting in touch.  I'll give you a ring!

Richard Leyba tejada · Answer

David sounds like you have this covered; if you need other contacts or want to talk sometime let me know

Adrian Smude · Answer

@David Young at the moment I'm looking for mobile homes on land, from Auburndale to Brandon. I do some wholesaling as well.

What about yourself besides of course this project you're about to get into?

David Young · Answer

Adrian - that's my understanding as well.

I'm not looking to change GCs, just wanted to make sure I had myself covered that the contractor would get all the work done.

Btw - plant city...pretty close. What type of RE you into?

David Young · Answer

Hey Wayne,

Thanks for the comment. Just took another look through my docs and it looks like we covered it when doing all of the paperwork e the lender... There was a contract in there that the GC had signed and that I also signed. Just wasn't clear at first that the doc was actually between me and the GC and had nothing to do w the lender.

Thanks again.

Wayne Brooks · Answer

Your contractor has no "contract with the bank" for the work,  maybe an agreement/procedures on how payments will be processed.  Usually the bank requires to see the contract between you and the gc in order to approve the loan, and Yes, you need a contract with the GC.