Rehab Bid for 203K


We have a ton of stuff to do to the new house before we move in.  Not only are there things we want to do to get the place ready, there are things we have to do according to the terms of our mortgage.   When we first started looking for a house, we knew we wanted something older and that meant a fixer-upper in order to stay within our price range and within the area we want to live.  Older houses have so much more character and feel so much more sturdy to us even if they need a little TLC.  Dennis is a really handy guy, and I grew up around home remodeling, so this was a no-brainer decision for us.

As we explored all our options for financing, I came across a HUD 203K Rehab Loan.  Basically, we qualified for a loan greater than the purchase price of the property in order to use the extra funds to fix up the place.  The rehab funds are disbursed in three payments as the work progresses.  The first disbursement is for materials and is paid out at the closing of the home sale.  The second disbursement has to be approved by the mortgage company (and I'm not exactly sure when and how that happens--guess we'll find out), and the final disbursement is only made when an inspector deems all work complete and up to standard.  At least, I'm pretty sure that's how it all happens.  I'm 100% sure about the last disbursement being contingent on completion of work.

We're really lucky because the house we bought is already in excellent condition and only needs a little work, comparatively speaking.  The nice thing about the work we have to to do to the place is that we don't have to do it at all!  We have a contractor to do all that for us.  Never in a million years did I think we'd be in a position to have someone else doing work to our house; I'm so used to DIYing everything with Dennis.  Well, we are planning on doing some of the work ourselves to save time and money, but most of the hard stuff is going to be taken care of by our contractor.

Which brings me to the list of thing that have to be done to the house.  For now, in order to keep this post short, I'm not going to bother listing the things we want to do to the house.  That'll be it's own beast of a post later, and will probably expand faster than it shrinks (at least at first).

Exterior:
  • Provide railing at front steps - since Dennis does welding and metal work, this is his job to do; can't wait to see what artistic design he comes up with
  • Replace any broken or missing brick; repair any separations in brick
there are a few loose bricks because of old mortar, but not because of a faulty foundation
  • Remove and replace damaged siding on walls of garage.  Paint to match.
only a few boards need to be replaced; we're going to paint the garage a different color

  • Repair damaged roof of awning above 2nd story rear entrance
this definitely needs to be fixed

  • Repair damaged flashing
  • Remove and replace any damaged fascia boards, soffit joists and soffits.  Paint to match.
the roof was recently replaced and is still good, but whoever did the work, didn't do any of the trim

  • Remove and replace any rotted window trim and sills.  Paint to match.
  • Properly seal and weatherstrip all doors and windows
  • Provide spindles on rear stairs and guardrails; spacing not to exceed 4" - another job for Dennis and his welding skills
Interior:
  • Install drywall on walls and ceiling of second garage bay
the garage bay on the right needs drywall

  • Remove and replace damaged ceramic tiles in 1st floor kitchen - we're going to do most of this work ourselves and we got an amazing deal on wood laminate flooring - I'll talk more about that in another post
most of the tiles in the kitchen are cracked, not to mention hideous.  I could live with them, but the bid includes floor replacement, so I guess we'll just have to upgrade--darn...

  • Repair 2nd level door between rear and middle bedroom
  • Install catwalk in front of A/C unit in attic
  • Remove and replace 1st floor water heater, including repair of any corroded supply lines
not only is the water heater in bad condition, it's in a terrible place in the kitchen; we're going to go with a tankless water heater and probably put it in the wall, or in the closet of the master bedroom on the other side of that wall

  • Replace any missing or damaged electrical cover plates - another thing Dennis and I will probably take care of ourselves
  • Provide GFCI at 1st floor kitchen counter tops, bathrooms, and garage
HVAC:
  • Each living unit has a separate system that will be made operational by repair or replacement - THE most important thing on the list and the number one reason we decided to move forward with a 203K loan on this property, considering what good shape the house is in.
So that's that.  These are the items listed on our proposal and, therefore, attached to our mortgage.  Our contractor has already started the work, and things are coming along slowly but surely.  I must say, this is all rather exciting!!

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