Makes sense--I was thinking more in terms of doing jobs for customers (I am both an real estate investor and own a restoration & construction company). Thanks!
Is there a particular requirement for the 203k loan? Because if you are referring to just a General Contractor license--Texas does not have a GC license. (You do need to register in the City of Austin, but this can be done by anyone when applying for a permit.) Let me know if I can help any further.
Is there a particular requirement for the 203k loan? Because if you are referring to just a General Contractor license--Texas does not have a GC license. (You do need to register in the City of Austin, but this can be done by anyone when applying for a permit.) Let me know if I can help any further.
RE:
@Jeremy VanDelinder Does the FHA 203K program require the use of only licensed contractors?
Perhaps someone who is more qualified can speak to the 203k loan--I've never used one--, but I'm not sure how they could require a GC license in states where no such thing exists. Let me clarify that licensed trades need to be used for electric, plumbing and HVAC, but there isn't a GC license in TX.
I always recommend using contractors with the accreditation as a Unfortunately, it appears there may not be any in the Austin, TX area. Maybe you can get one of them from a neighboring city to come to Austin.
And with a MF, you can use the 75% of the market rent from the units you will not occupy as your primary to help you income qualify for the mortgage, if you need it.
If you go for a 3-4 unit, the property will have to pass the FHA Self-Sufficiency Test (Stress Test). So, it's good you don't have to do that.
HUD does require the use of licensed and insured contractor. However, in areas that do not license certain contractors, such as GC's in Texas, a license/registration is not required, unless the local jurisdiction requires one.
HUD basically allows almost any contractor to do the rehab but unless the contractor knows and understands the HUD/FHA guidelines, paperwork, timelines, payment process, different versions of the 203k, can start the rehab with no deposit, has strong financials to pay for the startup costs and ongoing expenses of the 203k rehab, etc. (basically being Certified), the selected contractor is basically 'winging it,' and you're probably taking a gamble.
Because almost anyone can be a GC in Texas, you'll really need to be extra careful who you hire.
You're only as strong as your weakest link. So, select your partners wisely.
@Paul Welden That is incredibly helpful information--thanks so much. Question: As a GC, do you think it is worth it for me to become a certified 203k contractor? What is involved in that process?
But it can be very difficult for you to be the GC on your own rehab loan where you are the borrower, even though HUD/FHA allow it (most lenders will not), and the GC cannot have any conflict of interest or identity of interest with anyone else involved in the transaction.
But, yes, there are many great benefits for GC's who participate with rehab loans .... not to mention the benefits that rehab loans provide the the other industry partners, buyer, sellers, community, governments, real estate values, etc.
Makes sense--I was thinking more in terms of doing jobs for customers (I am both an real estate investor and own a restoration & construction company). Thanks!