There’s a common misconception that contractors need to be certified in order to participate in FHA 203k loans. This isn’t true! There is NO actual official 203k training process that is certified or approved by HUD or FHA.
The way we determine which contractors are going to be able to participate in FHA 203k loans is by:
Certain contractors, if they can’t float the loan- or “float the job,” as we say, then they’re not going to be able to participate in FHA 203k loans. Essentially, “floating the job,” means being able to finance the job right from the start. With a Full 203k loan, contractors don’t receive any upfront cash. So, it’s important for contractors to understand this all up front, and we make sure of this!
We always do the following with contractors that work with us:
So these are the things that we will do as a lender to see if they understand and whether or not they meet the qualifications of a 203k contractor.
One of these is the The 203k contractor directory at 203kContractors.com, which is owned and facilitated by Paul Welden. He’s got a great resource. He goes through an intensive protocol of training the contractors so they understand the program from start-to-finish. It’s a 30 day- all wrapped into one course- kind of program. Then once they’ve completed the course, he puts them through a test on which they must maintain a minimum score of at least 80%. If they maintain that 80%, they get a nice, big, shiny FHA 203k certified directory logo. We have some of these certified contractors on our Web site currently, so you can always use these kind of contractors- and know, full-well, that they understand the program and know that they are able to maintain the necessary requirements to participate in an FHA 203k loan.
We always use and look for contractors who really understand the program. But, back to the main point, no, there is no certification program through HUD or FHA. It’s our job as lenders to make sure that the contractors understand how the program works and make sure that they are going to be able to meet the requirements and get the job done!