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Old 06-30-2007, 09:09 PM   #1
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probibly wont find anyone but....................


I just found out yesterday i qualify for a homestead loan which means I can lower my rate by 3.5 percent and also get at least 60 thou or more to completely finish all the renovations on my house.The catch is all the work has to be estimated out by a contractor and signed off when done.Now the bad part ,I have alot of the work done but their is still plenty to do ,and some I will need pros to do like electrical ( new boxes and upgrading old boxes) and roofing (I think one are about 45x24 needs a complete roof) also taking care of that little area I have posted in another thread called incloseing this area but I would really like to continue to finish the inside myself (its kind of fun and its coming out real nice).It would be great to have all the money I need to finish all that I want to do but I am not sure I will be able to find anyone that would be willing to get into this.Have any of you contractors ever come on a situation like this and did you work with the homeowner on it or just walk away from it.I do understand the issues of responsibility and the part of not getting the whole job,but in this instance its not like we would be working on the same thing or same area and any area needing a permit I would leave to the pro (thats another area that the electrical and an addition would come into) renovations in this area do not need permits (i have the code book and a letter from the third party inspector that this county users right here).I am just wondering if i am asking for to much I do have another route to go but will most likely get really really poor work in the areas I need a pro (another words I would have to hire a jack leg)

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Old 07-01-2007, 08:25 AM   #2
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probibly wont find anyone but....................


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Originally Posted by clasact View Post
I just found out yesterday i qualify for a homestead loan which means I can lower my rate by 3.5 percent and also get at least 60 thou or more to completely finish all the renovations on my house.The catch is all the work has to be estimated out by a contractor and signed off when done. ...... It would be great to have all the money I need to finish all that I want to do but I am not sure I will be able to find anyone that would be willing to get into this.Have any of you contractors ever come on a situation like this and did you work with the homeowner on it or just walk away from it.I do understand the issues of responsibility and the part of not getting the whole job,but in this instance its not like we would be working on the same thing or same area and any area needing a permit I would leave to the pro (thats another area that the electrical and an addition would come into) renovations in this area do not need permits (i have the code book and a letter from the third party inspector that this county users right here).I am just wondering if i am asking for to much I do have another route to go but will most likely get really really poor work in the areas I need a pro (another words I would have to hire a jack leg)
I am assuming that this is the program that you are qualifying for:

http://www.phfa.org/consumers/homebuyers/homestead.aspx

Note this point from the above website:

"....Program requirements and funding availability are determined by the US Department of Housing and Urban Development as set forth in the HOME Investment Partnership Program and the American Dream Downpayment Initiative. PHFA HOMEstead funding is therefore allocated to eligible homebuyers on a first-come, first-served basis."


Ok, you asked:

1.) First off, NO.... I have never run into such a situation before with a client requesting such an "arrangement".

2.) Based on what this looks like: NO, I would NEVER go into such an arrangement with a client (asking that I sign something/anything that is not accurate or truthful). I do not know all the requirements that the loan stipulates, nor the laws that govern it, but, I still would not put my professional name, company name, license or reputation on the line (if the loan stipulated that the Contractor had to "sign-off" that "they themselves" promise that they did all the work - if I did not). 99.99% of licensed and professional GC's would feel likewise. (The other .01%, you read about, that usually end up heading to jail due to their personal interpretations of what is right and wrong....)

3.) Now in briefly reviewing some information (assuming that this is the same program):

http://www.phfa.org/lenders/lpa/rand...ower_randr_faq

On the above listed web page, this is what I found:

Am I allowed to perform the renovations or repairs myself?
Any borrower can perform non-skilled labor such as painting. Borrowers who are qualified and licensed, if applicable, to work as a contractor or in a skilled trade may perform work for which they are qualified. Borrowers doing their own work will only be loaned money to pay for the cost of materials, not labor.

If this is in fact the program that you are referring to, then you need to do thorough research about what areas you may be able to do and that you are approved to do. You need to truthfully state what these areas are - for your own benefit and for the contractor's benefit and his legal safety....

Now, words of caution:
Basically, I am clearly going to assume that this is a GOVERNMENT sponsored program. As with all government assisted programs, there are clear and concise requirements and stipulations. You are talking about money, the government's money. Basically, you are taking the government's money and your are promising to use it in a specific manner. You DO NOT want to ask someone else to assign their name to an arrangement and promise to the government that is truthful (when it is not entirely truthful).
So again, get all the details of this program and follow it to the letter.

If you do not follow the stipulations required for the loan or the assistance, & then the two of you agree to lie to the government or bank about it.....
The truth of the matter is that, no matter how badly you may feel that you could use that money, that is still called: "Defrauding the Government" and/or "Bank Fraud".

Again, I am not an expert on homestead loans. I am basing this on what you have written, the above listed website, and what it sounds like.


Last edited by AtlanticWBConst.; 07-01-2007 at 09:33 AM. Reason: spelling
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Old 07-01-2007, 09:08 AM   #3
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probibly wont find anyone but....................


Atlantic thanks for the input that is pretty much what I thought from the start but it never hurts to ask. After reading the link you posted and the papers I got from the bank no they are not the same.This is not a government loan or even backed by the government,but a loan from the bank for HO that cant get a refi due to unfinished renovations.I think the other term she used was a refurbish loan.It dose state I can do the work as long as it is not "structural in nature or in violation of existing codes" I guess what I was think was I could do all the things like drywall,painting,trim.putting in my kitchen cab.and so forth ( the stuff that takes up so much time) and let the contractor do whatever parts he really wanted plus the parts I mentioned. really do appreciate your honest answer on this and other areas you have helped with. guess I will call the bank Monday and see what else I can do since it would be great not to have any budget constraints to worry about
THANK AGAIN
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