LEARNING CENTER
A checklist you can hand a contractor at the first meeting, before anyone wastes two weeks.
A checklist you can hand a contractor at the first meeting, before anyone wastes two weeks.
There's no federal contractor certification — the FHA-approved contractor doesn't exist. What exists is a document package your lender requires before they'll approve a contractor on your file.
The package isn't long. What makes it painful is discovering an item is missing three weeks in, after the write-up is done and the bid is in. So here's the whole list, up front.
1. Contractor's bid, itemized Line by line, mapping to the consultant's work write-up. Not a lump sum. Each line needs a labor and material breakdown sufficient for the lender and consultant to reconcile it against the write-up. This is the single most common source of back-and-forth, because contractors accustomed to lump-sum quoting submit one and get it returned.
2. Proof of licensing or registration Whatever the state and locality require for the trades involved. This varies enormously by jurisdiction — some states license general contractors tightly, others only register them, and specialty trades like electrical and plumbing almost always carry separate licensing. Current, not expired, and matching the business entity on the bid.
3. General liability insurance certificate Naming coverage limits. Lenders typically set a minimum. The certificate needs to be current through the expected project duration — a policy expiring in month three will get flagged.
4. Workers' compensation coverage Where the contractor has employees and the state requires it. A sole proprietor with no employees may be exempt, and the lender will want documentation of that rather than silence.
5. W-9 Straightforward, and needed because the contractor will be receiving disbursements.
6. Business documentation Entity registration, EIN, and a physical business address. A contractor with no verifiable address is a problem for reasons beyond the paperwork.
7. Contractor's resume or qualifications statement Some lenders require a written summary of experience — years in business, types of projects, prior renovation-loan work. Others take references instead.
8. References Prior clients, ideally including at least one completed 203k or HomeStyle project. Lenders vary on whether they actually call them; you should regardless.
9. Homeowner-contractor agreement The signed contract between you and the contractor, consistent with the approved scope and the bid amounts. The lender will want to see that what you signed matches what they're funding.
10. Lien waivers Not required up front, but required at each draw — from the contractor and often from subcontractors and material suppliers. Worth raising at the first meeting so nobody is surprised in month two. How draws work covers where these land in the cycle.
The itemized bid. Contractors who've never done a 203k submit a lump sum, it gets returned, they rebuild it, and that's a week to ten days gone. Ask for itemization in the first conversation and explain why — the write-up is itemized, and draws are measured against line items, so a lump sum literally cannot be administered.
Insurance certificates with wrong dates or limits. The contractor's agent has to issue an updated certificate, which takes a few days, and it's the kind of thing that gets discovered late because everyone assumes it's fine.
Both are trivially preventable and both routinely cost a week.
Beyond the core package, individual lenders add their own requirements. Common ones:
- Concurrent job limits — a cap on how many active 203k files one contractor can carry with that lender
Ask your lender for their specific list at the start. There is no universal package, and assuming one lender's requirements match another's is how contractors get declined on the second file after sailing through the first.
If you intend to do any of the work yourself, that's governed separately and more tightly — the borrower has to demonstrate the skills and the ability to complete it within the timeline, and labor for self-performed work generally isn't financed. The self-help rules are worth reading before you plan on it.
Send the list to every contractor you're interviewing, before they bid. Two things happen.
Contractors who have done this will confirm easily and ask which lender. That's your signal.
Contractors who haven't will either ask good questions — also fine — or go quiet. The ones who go quiet were going to go quiet in week three instead, and you've just saved yourself three weeks.
- Itemized bid, licensing, general liability, workers' comp, W-9, business documentation, references, signed agreement, and lien waivers at each draw.
- The itemized bid and stale insurance certificates cause most of the delay.
- Lenders add their own requirements — bonding, concurrent job caps, minimum years in business. Ask for the specific list up front.
- Send the checklist to contractors before they bid. Their reaction tells you what their reference calls would.
Lenders who write these regularly hand contractors a clean checklist on day one instead of discovering gaps in week three. Get matched with a lender who does.
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