II.A.9.k. Additional Required Documentation (09/14/15)

© HUD Single Family Housing Policy Handbook 4000.1

The Consultant must provide the Mortgagee with the following documentation.

Included in this section are:

i. 203(k) Consultant’s Certification
ii. Consultant/Borrower Agreement
iii. Inspections and Draw Requests
iv. Change Order Requests

i. 203(k) Consultant’s Certification

All Consultants are required to sign the following certification after preparing/reviewing the Work Write-Up and Cost Estimate, stating:

• “I hereby certify that I have carefully inspected this property for compliance with the general acceptability requirements (including health and safety) in HUD’s Minimum Property Requirements or Minimum Property Standards. I have required as necessary and reviewed the architectural exhibits, including any applicable engineering and termite reports, and the estimated rehabilitation cost and they are acceptable for the rehabilitation of this property. I have no personal interest, present or prospective, in the property, applicant, or proceeds of the mortgage. I also certify that I have no identity-of-interest or conflict-of-interest with the borrower, seller, mortgagee, real estate agent appraiser, plan reviewer, contractor, or subcontractor or any party with a financial interest in the transaction. To the best of my knowledge, I have reported all items requiring correction and the rehabilitation proposal now meets all HUD requirements for 203(k) Rehabilitation Mortgage Insurance.”Warning: HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 U.S.C 1001, 1010, 1012; 31 U.S.C 3729, 3802).

ii. Consultant/Borrower Agreement

The Consultant and Borrower must sign a written agreement that fully explains the services to be performed and the fees to be charged for each service. The written agreement must disclose to the Borrower that any inspection performed by the Consultant is not a “Home Inspection” as detailed in the disclosure form HUD-92564-CN, For Your Protection: Get a Home Inspection.

iii. Inspections and Draw Requests

(A) Draw Request FormAt each draw inspection, the Consultant must complete form HUD-9746-A, Draw Request Section 203(k), to indicate completion of the repairs in compliance with the Work Write-Up and architectural exhibits. The Consultant must ensure all repairs meet all local codes and ordinances, including any required permits and inspections. The Consultant must ensure that both the Borrower and the contractor sign the form to certify that the work has been completed in a workmanlike manner before authorizing payments.Generally, a release of funds may not be requested for materials that have been paid for but not yet installed.

(B) ExceptionThe Consultant may request a release of funds for:

• materials costs for items, prepaid by the Borrower in cash or by the contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date; or
• up to 50 percent of materials costs for items, not yet paid for by the Borrower or contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date.

To request release of funds for these items, the Consultant must provide the Mortgagee with a copy of the contract and order with the draw request.

iv. Change Order Requests

The Consultant must complete a change order request on form HUD-92577, Request for Acceptance of Changes in Approved Drawings and Specifications, for contingency items and other changes that may increase or decrease the cost of rehabilitation or the value of the Property.

Work must be 100 percent complete on each change order item before the Consultant may authorize release of funds for the work noted on the change order. The Consultant must ensure that all repairs meet all local codes and ordinances, including any required permits and inspections.