Fill - Free fillable Home Improvement Financing Guide (M&T Bank) PDF form

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Home Improvement

Financing Options

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You Don’t Have to Wait to Renovate

Keeping your home up-to-date with periodic improvements can enhance your daily quality of life, but

keeping your home updated and in good repair also can increase the value of your home in the event you

choose to refinance or sell.

Home improvements can range from the easy do-it-yourself project like replacing weather stripping on

doors to more expensive projects like renovating a kitchen, replacing a roof, finishing a basement, or

adding a room.

Your project may involve renovating your current home or one you intend to purchase that may need

a little TLC or some updating to suit your needs and taste. Regardless of the project, your M&T Bank

products can play a role in financing the improvements you wish to make.

Home Improvement Financing Options

If you are planning to improve your current home:

• Small or less-expensive projects are often paid with cash and/or a credit card, which is best used

for short-term financing that you intend to pay off within a few months.

• Larger or more expensive projects can be financed using the equity in your home, with either a

home equity line of credit or a cash-out refinance of your mortgage.

• If the cost of your project exceeds the “lendable equity” available to you, refinancing with a

renovation mortgage enables you to borrow against the value that will be created when your

improvements are complete.

If you are planning to purchase a home to renovate:

• Small or less-expensive projects can be paid with cash and/or a credit card as mentioned above.

• Buyers often defer larger more expensive projects for a few years until they replenish their savings

or build equity in their home. With a renovation mortgage from M&T Bank, you can finance the

purchase of your home and the cost of renovation in one loan and begin your project within a few

weeks of closing. This can also allow you to build equity and re-build savings immediately.

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Home Improvement Financing Options

Renovation Mortgage • Cash • Savings • Home Equity Line • Cash Out Refinance

Table of Contents

Renovation Mortgage Highlights ........................................................................... 4

Fannie Mae Homestyle

• Homestyle Step by Step Guide .............................................................................. 5-6

• Required Documents

– Homestyle Borrower Acknowledgement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-8

– Homestyle Renovation Mortgage Consumer Tips ....................................................... 9-10

– Homestyle Homeowner/Contractor Agreement ........................................................ 11-12

– Contractor Resume ...................................................................................... 13

– Permit Certification ...................................................................................... 14

– Project Estimate Options (pick only one)

> FNMA Specification of Repairs Form signed by contractor and borrower .......................... 15-27

> Contractor Letterhead: all work must be itemized (i.e., windows, doors, siding)

and each item must show the cost of materials and labor separately.

FHA 203k

• 203k Step By Step Guide ..................................................................................28-29

• Required Documents

– 203k Borrower Acknowledgement ....................................................................... 30

– 203k Homeowner/Contractor Agreement ............................................................. 31-33

– Addendum to Purchase Contract ......................................................................... 34

– Borrower’s Identity of Interest Certification ............................................................... 35

– Contractor Resume ...................................................................................... 36

– Permit Certification ...................................................................................... 37

– If a HUD consultant is applicable:

> HUD Consultant’s Identity of Interest Certification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

> HUD Consultant Non-Inspection Disclosure .......................................................... 39

> Specification of Repairs Form (this is provided by your HUD consultant)

– Project Estimate

> Limited 203k Work Plan Options (pick only one):

- FNMA Specification of Repairs Form: signed by contractor and borrower. ..................... 40-52

Must state that no work is structural.

- Contractor Letterhead: all work must be itemized (i.e., windows, doors, siding) and each item must

show the cost of materials and labor separately. Must state no work is structural

> Standard 203k

- Contractor Letterhead: all work must be itemized (i.e., windows, doors, siding) and each item must

show the cost of materials and labor separately.

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Renovation Mortgage Highlights

• Avoid over-improving a property (spending more than the value created) with the built in

boundaries of a renovation mortgage

• You’ll be choosing a qualified and reputable contractor to complete your renovation and your

contractor will have confidence in your ability to pay for the project

• Upon closing, your renovation mortgage loan is fully disbursed at settlement:

– If you’re purchasing a home the seller is paid in full

– If you’re refinancing your existing mortgage loan is paid in full

– M&T will set up an escrow account that includes the money to pay for your renovation

– Your renovation escrow account includes a small contingency reserve – usually 10% of

project cost

– This reserve can be financed as part of the loan amount or can be cash from the borrower

deposited in a special reserve account.

• Your monthly payments of principle, interest, taxes and insurance begin after settlement

• Have confidence that your renovation will start and be completed in a predetermined amount of

time based on the type of product you choose:

– The renovation for a FHA 203k product must be completed in six months

– A renovation with a FNMA Homestyle must be completed in nine months

– Your renovation project must begin within 30 days of settlement

• There are a number of required documents from Fannie Mae and HUD that you’ll be required to

sign to make sure you understand how your renovation mortgage loan works and what is required

by all parties – borrower, contractor, lender.

• Detailed documentation is required for your protection before your renovation loan settlement including:

– Full appraisal based on the “after improved” value

– Licensed, insured and experienced contractor (no self-

help or DIY from borrower)

– Contracts, plans, estimates, permits (where

applicable), licenses (where applicable)

• The work begins on the project after loan settlement.

– Contractors are paid in draws as work is completed

and inspected

– Draw payments are in the form of a two party

check co-payable to contractor and borrower. Your

contractor must perform satisfactory work in order to

be paid, and if the contractor performs the work, the

borrower cannot arbitrarily withhold payment.

• Additional information regarding renovation lending along

with step-by-step guides and the required documents and

forms follow:

– Fannie Mae Homestyle

– FHA 203k

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STEP ONE: BEFORE LOAN APPLICATION

Projected Date:

Borrower assembles all renovation documentation.

Green: Borrower completes

Blue: Contractor completes

Borrower Chooses Contractor(s)

•

Fannie Mae requires a licensed and

experienced contractor perform all work

Borrower Acknowledgement

• Check 1 of the 3 boxes and sign

HomeStyle Consumer Tips

• Check 1 of the 2 boxes in 2nd paragraph and sign

Borrower/Contractor Agreement

•

Fannie Mae requires that you have a signed

agreement between yourself and your contractor

• You insert the renovation cost in the form, so

this cannot be completed until you and your

contractor have agreed on the cost

Contractor Resume

•

Contractor also provides a copy of any

applicable licenses and proof of insurance

Permit Certification

• This identifies the number and cost of any

permits required by your municipality

Project Estimate

• Your general contractor should provide a

detailed estimate that breaks out labor and

materials for each major item. Include copies of

appropriate contractor’s license and insurance

Make sure your documentation is accurate and

can be understood by someone unfamiliar with

your project. Contractors are rarely available to

talk to processors during normal working hours.

STEP TWO: LOAN APPLICATION

Projected Date:

• Bring all the documentation from Step 1

• Loan Officer provides you with a loan estimate

• Loan Officer sends application to processing

• Appraisal is ordered on your behalf

1

(continued on back)

HomeStyle Renovation Program

STEP THREE: LOAN PROCESSING

Projected Date:

Processor will verify all renovation project

documents have been completed, signed, and

that there are no discrepancies in the work

described or the amount estimated across the

following documents:

• Loan Application

• Permit Certification

• Project Estimate

• Borrower/Contractor Agreement

Once the property appraisal is received, your file

will be reviewed by an underwriter.

STEP FOUR: LOAN UNDERWRITING

Projected Date:

• The underwriter reviews the complete loan file,

including project documentation and the

contractor(s) qualifications

• Underwriter verifies that the loan and the

project meet Fannie Mae guidelines

STEP FIVE: LOAN APPROVAL

Projected Date:

• Your processor will review the commitment

letter with you regarding any final conditions

for closing

• All conditions must be provided and cleared at

least 3 weeks prior to your target closing date

STEP SIX: LOAN CLOSING

Projected Date:

• Attorney/Settlement agent reviews the loan file,

confirms funds needed to close as well as any

other items needed and schedules the closing

date with you

• If you are refinancing, your permits should be

obtained prior to settlement. If you are purchasing,

you cannot obtain a permit until you are the

owner of the property

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3

4

5

6

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NOW YOU ARE READY TO START RENOVATION

STEP SEVEN: RENOVATION

Projected Date:

• You will receive a welcome letter, email and

call from your Draw Administrator within 5 days

of closing

• Funds will be available for release after this 5 day

period. No funds can be released before this time

• Any required building permits must be in place

before the first draw can be issued

• Within 30 days of closing, M&T Bank requires

that the project start

• Fannie Mae requires the project to be

completed within 9 months, per the

Rehabilitation Loan Agreement you signed

prior to application

STEP EIGHT: MAKING PAYMENTS

• Your first monthly payment will be due on the

1st of the second full month after closing and

then every month thereafter

• The fully amortizing payments are based on the

entire amount of your loan (including the

amount for renovation)

STEP NINE: OBTAINING A DRAW

• When a stage of the plan is complete, call your

Draw Administrator to request a draw.

• The Draw Administrator will send an inspector to

confirm the work has been performed according

to the plan

• If the inspection is satisfactory, M&T issues a

check to pay the contractor. It is co-payable

to you and the contractor and sent to you via

a 2 day delivery service

• The draw process is repeated until the project

is complete and the loan is fully disbursed

STEP TEN: PROJECT COMPLETION

• A final inspection and title update is obtained by

the Draw Administrator

• If applicable, a Certificate of Occupancy/final

municipal inspection may be required for any

permits previously issued

Equal Housing Lender.

All loans are subject to credit and property approval.

43855 200219 VF

10

8

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For more information, contact M&T Bank today.

Name, NMLS#

Title

Phone

Email

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Form 2600 FNMA Homestyle Borrower’s Acknowledgement 10/1/2003

Homestyle Borrower’s Acknowledgment

Condition of Property: I/We understand that the property I/we am/are purchasing is not FannieMae approved, and

FannieMae does not warrant the condition or the value of the property. I/We understand the FannieMae plan review

(where performed) and the appraisal are performed to determine compliance with the required architectural exhibits

and to estimate the value of the property, but neither guarantees the house is free of defects. I/We understand I/we

have the option to retain an independent consultant and/or a professional home inspection service to perform an

inspection of the property. The cost of this inspection can (or could be) included in the mortgage.

Loan Requirements: I/We understand at the time of the loan closing of a Home Improvement Mortgage Loan, for

which I/we have applied to my lender, the proceeds designated for the rehabilitation or improvement (including a

contingency reserve, mortgage payments, and any other fees where applicable) are to be placed in an interest

bearing escrow account. The Rehabilitation Escrow Account is not, nor will it be treated as, an escrow for the paying

of real estate taxes, insurance premiums, delinquent notes, ground rents or assessments. I/We hereby request the

lender, after the Final Release Notice is issued to:

� pay the net interest income directly to me/us.

� apply the net interest income directly to the mortgage principal balance for an equal amount of principal

reduction.

I/We understand that the Rehabilitation Escrow Account will cease paying interest to me/us if (1) the loan payments

are delinquent for more than 30 days; or (2) the completion date (or an approved extension) has expired. During this

period, the interest will be paid down on the mortgage principal. I/We understand that if I/we clear up the delinquent

or default status and/or the completion date has not expired or an extension date has been approved, then the

interest on the escrow account will begin again to be paid according to the request above.

I/We understand that no draws on the escrow account can be made until all permits have been issued by the local or

state building departments, where required. I/We further understand I/we can only request moneys for the actual cost

of rehabilitation. If any cost savings result on any line item of the Draw Request, the amount saved must be used to

prepay the mortgage principal.

I/We understand the contractor(s) is responsible to complete the work described in the architectural exhibits in a

workmanlike manner. If I/we agree that the work has been properly completed I/we will sign the Draw Request form,

thereby accepting the responsibility that the completed work is acceptable and payment is justified. I/We understand

there may be, at the sole discretion of the lender, a ten percent (10%) holdback on each Draw Request to assure that

the work is properly completed and for lien protection.

I/We understand I/we am/are responsible to negotiate any and all agreements with the contractor(s) I/we select, and

that FannieMae suggests that the agreement with the contractor(s) should include a provision for binding arbitration

with the American Arbitration Association on any dispute.

I/We understand if I/we change a contractor for any reason, I/we may be obligated under the terms of the original

contractor’s agreement, and I/we should seek legal advice before taking such action. If I/we disagree with the

contractor regarding the acceptable completion of the work I/we can request an inspection by the fee inspector to

determine if the work has been property completed. If an agreement cannot be made with the contractor, the lender

may hold the money until such time as an agreement is reached, or an arbitrator’s decision is rendered.

I/We understand that neither the lender nor FannieMae provides any warranty on the completed work on the

property. I/we am/are responsible to obtain such warranty(s) from the contractor(s), and the warranty should be

stated in the Homeowner-Contractor Agreement.

I/we understand I/we am/are responsible to make the mortgage payments during the term of the loan, including the

rehabilitation period, to ensure that the property will not go into default. The construction on the home must start

within 30 days; if the construction ceases for more than 30 days, the lender may consider the loan in default, or the

lender may use the escrow money to have the work completed. If the work stops or is not progressing as it should or

if the work does not comply with accepted architectural exhibits, the lender may require additional compliance

inspections to protect the security of the loan and I will be responsible to pay for the inspections, and the cost of the

inspections may be withheld at the next draw request.

I/We understand no changes to the architectural exhibits can be made without written approval by the lender on a

letter or on a form (HUD-9746-A) which I submit to the lender. Also, the contingency fund is set up for changes that

affect the health, safety, or items of necessity of the occupants of the property. If the contingency reserve is

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Form 2600 FNMA Homestyle Borrower’s Acknowledgement 10/1/2003

insufficient, I must place additional moneys into the account for payment upon acceptance of the change. A change

order will be made to assure that the moneys are available to the contractor upon completion of the changed work.

I/We understand if there are unused contingency funds, mortgage payments, inspection fees or other monies in the

Rehabilitation Escrow Account after the Final Release is processed, the lender, in compliance with Fannie Mae

regulations, must apply these funds to prepay the mortgage principal, provided those items are a part of the

mortgage.

I/We understand the lender, at lenders sole discretion, may retain the ten percent (10%) holdback from each draw, for

a period not to exceed 35 days or the time period required by law to file a lien (whichever is longer), to ensure

compliance with state lien waiver laws or other state requirements. Upon completion of the work, I understand I will

be provided: (1) the Final Draw Request; (2) the Final Release Notice; (3) an accounting of the final distribution of all

funds.

This statement must be delivered to you prior to closing the loan. Return one copy to your lender as proof

that you have read the entire document. Keep one copy for your records. You, the borrower(s), must be

certain that you understand this information. Sign here only after you have read this entire document.

Seek professional advice if you are uncertain.

x___________________________________________________________________________

Borrower’s Signature and Date

x______________________________________________________________________________

Co-Borrower’s Signature and Date

I, the lender, certify this information was delivered to the borrower(s) prior to the time of loan closing.

x_____________________________________________________________________________

Lender’s Signature and Date

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HomeStyle

®

Renovation Mortgage Consumer Tips

Please review the important tips listed below about Fannie Mae’s HomeStyle Renovation mortgage and home

improvement projects.

 For the HomeStyle Renovation mortgage, the lender may advance up to 50% of the cost of the materials to secure suppliers for the project.

A portion of these funds may be used to pay for architect, design and plan development, and permitting fees. The borrower may not directly

receive any funds. The funds provided forrenovation are placed in an interest-bearing escrow account (Renovation Escrow Account).

 The lender may require that a contingency reserve be placed in the Renovation Escrow Account to cover unforeseen repairs or deficiencies

during the renovation. If funds remain after the renovation is complete, they can be applied to additional elective repairs or improvements

or can be used to reduce the principal balance. If you deposit funds into the account, the funds you deposited can be paid directly back

to you at your option.

 When selecting a contractor, always review the contractor’s references, licensing, and financial background. Ask the lender for a

Contractor Profile form to assist in your review, or locate one on ourwebsite.

 You are responsible for negotiating any agreements or warranties with the contractor. The lender does not provide any warranty on

the contractor’swork.

 You are responsible for overseeing the renovation and ensuring that it is done as specified in the Construction Contract with the

contractor. If work stops for an extended period of time, or there are problems with the work performed that may cause significant

delays, you must contact thelender.

 If you are purchasing a home to renovate it, please note that the lender does not warrant or guarantee the condition of the property

being purchased or the renovation.

 You are responsible for making the mortgage payment each month, even if the renovation is not satisfactorilycompleted. Borrower may

finance up to 6 months of principal, interest, taxes, and insurance (PITI) payments if the home cannot be occupied during the renovation.

 Funds for the renovation are paid in accordance with a schedule acceptable to you, the contractor, and the lender. Material draws may

be issued immediately after closing of the loan. Funds are released to the contractor after an inspection of each phase of the renovation.

The funds are provided in a check made payable jointly to both you and the contractor. You request these payments on a draw request

form submitted to the lender.

 Do not approve funds be released to the contractor if you are not happy with the work. Do not accept unsatisfactory work. Do not

pay the contractor “up front” out of your own funds before the renovation is satisfactorilycompleted.

 The lender may withhold some of the funds from each Draw Request. These funds are paid to the contractor when the work is

completed. This helps to protect you from a contractor failing to complete the renovation.

 If you would like to revise the original approved renovation, you must submit a Change Order Request to the lender for approval,

and deposit any additional required funds (including contingency reserve) in the Renovation Escrow Account.

 When the renovation is completed, the appraiser will be required to inspect the home and issue an addendum to the

appraisal indicating that the work has been completed. The lender should provide you an accounting for all distribution of

funds in the Renovation Escrow Account.

Case Number: Date:

Borrower Names:

I acknowledge that I have read these Consumer Tips and that I understand them.

Borrower’s

Signature: Date:

Co

-borrower’s Signature: Date:

The lender certifies the Borrower(s) has received these Consumer Tips.

Date:

Form 1204 | February 2018

Page 1 of 2

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Instructions

HomeStyle® Renovation Consumer Tips

This document includes a list of helpful tips and information for HomeStyle Renovation mortgages, which can also

be used as general "best practices" information for most home improvement projects.

Copies

Original.

Print this form

This form must be printed on letter size paper, using portrait format.

Instructions

This is NOT a required document for HomeStyle mortgages. However, a lender may use it to help the borrower

better understand the terms of a renovation or home improvement mortgage. As an option, a lender may require

the borrower to sign the document to confirm that he or she understands the information provided.

Form 1204 | February 2018

Page 2 of 2

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HomeStyle Homeowner/Contractor Agreement

Form 2101 (Rev. 01/20/2010)

HOMESTYLE HOMEOWNER/CONTRACTOR AGREEMENT

Owner's Name(s):

Address:

City:

State:

Zip Code:

Telephone Number: Work:

Home:

Contractor’s Name(s):

License No:

Address:

City:

State:

Zip Code:

Telephone Number: Work:

Home:

THIS AGREEMENT, made this date, _ _________________, between the above mentioned Homeowner

(Owner) and Contractor, is for the rehabilitation of the property located at _____ ____________________________

_____ _________________that has been approved for a Fannie Mae HomeStyle rehabilitation mortgage. The

Owner(s) shall pay the Contractor the sum of $__ ________ for completion of the work, including all sales tax due

by law, together with such increases or decreases in the contract price as may be approved in writing by the Lender. The

work will begin within 30 days of loan closing with the Lender and will be completed by __ _______________ ,

unless delayed beyond the Contractor's control. The General Provisions listed below are made a part of this Agreement.

The contract documents consist of the architectural exhibits listed in the Rehabilitation Loan Agreement between the

Owner(s) and the Lender, or as described below (or on an attached sheet):

Owner(s) Signature(s) and Date ____ _________________________________________________

Contractor's Signature and Date ______ _______________________________________________

1. Contract Documents: This Agreement includes all general provisions, special provisions and architectural

exhibits that were accepted by the lender. Work not covered by this agreement will not be required unless it is required by

reasonable inference as being necessary to produce the intended result. By executing this Agreement, the contractor

represents that he/she has visited the site and understands local conditions, including state and local building regulations

and conditions under which the work is to be

performed.

2. Owner: Unless otherwise provided for in the Agreement, the owner will secure and pay for necessary

easements, exceptions from zoning requirements, or other actions which must precede the approval of a permit for this

project. If owner fails to do so then the contract is void. If the contractor fails to correct defective work or persistently fails

to carry out the work in accordance with the agreement or general provisions, the owner may order the contractor in

writing to stop such work, or a part of the work, until the cause for the order has been eliminated.

3. Contractor: The contractor will supervise and direct the work and the work of all subcontractors. He/she will

use the best skill and attention and will be solely responsible for all construction methods and materials and for

coordinating all portions of the work. Unless otherwise specified in the Agreement, the contractor will provide for and/or

pay for all labor, materials, equipment, tools, machinery, transportation, and other goods, facilities, and services necessary

for the proper execution and completion of the work. The contractor will maintain order and discipline among employees

and will not assign anyone unfit for the task. The contractor warrants to the owner that all materials and equipment

incorporated are new and that all work will be of good quality and free of defects or faults. The contractor will pay all

sales, use and other taxes related to the work and will secure and pay for building permits and/or other permits, fees,

inspections and licenses necessary for the completion of the work unless otherwise specified in the Agreement. The

contractor will indemnify and hold harmless the owner from and against all claim, damages, losses, expenses, legal fees or

other costs arising or resulting from the contractors performance of the work or provisions of this section. The contractor

will comply with all rules, regulations, laws, ordinances and orders of any public authority or HUD inspector 9if

applicable) bearing on the performance of the work. The contractor is responsible for, and indemnifies the Owner against,

acts and omissions of employees, subcontractors and their employees, or others performing the work under this

Agreement with the contractor.

Page 12

HomeStyle Homeowner/Contractor Agreement

Form 2101 (Rev. 01/20/2010)

The contractor will provide shop drawings, samples, product data or other information provided for in this

Agreement, where necessary.

4. Subcontractor: Selected by the contractor, except that the contractor will not employ any subcontractor to

whom the owner may have a reasonable objection, nor will the contractor be required by the owner to employ any

subcontractor to whom the contractor has a reasonable objection.

5. Work By Owner or Other Contractor: The owner reserves the right to perform work related to the project,

but which is not a part of this Agreement, and to award separate contracts in connection with other portions of the project

not detailed in this Agreement. All contractors and subcontractors will be afforded reasonable opportunity for the storage

of materials and equipment by the owner and by each other. Any costs arising by defective or ill-timed work will be borne

by the responsible party.

6. Binding Arbitration: Claims or disputes relating to the Agreement or General Provisions will be resolved by

the Construction Industry Arbitration Rules of the American Arbitration Association (AAA) unless both parties mutually

agree to other methods. The notice of the demand for arbitration must be filed in writing with the other party to this

Agreement and with the AAA and must be made in a reasonable time after the dispute has arisen. The award rendered by

the arbitrator(s) will be considered final and judgment may be entered upon it in accordance with applicable law in any

court having jurisdiction thereof.

7. Cleanup and Trash Removal: The contractor will keep the owner’s residence free from waste or rubbish

resulting from the work. All waste, rubbish, tools, construction materials, and machinery will be removed promptly after

completion of the work by the contractor.

8. Time: With respect to the scheduled completion of the work, time is of the essence. If the contractor is delayed

at anytime in the progress of the work by change orders, fire, labor disputes, acts of God or other causes beyond the

contractor's control, the completion schedule for the work or affected parts of the work may be extended by the same

amount of time caused by the delay.

The contractor must begin work no later than 30 days after loan dosing and will not cease work for more than 30

consecutive days.

9. Payments and Completion: Payments may be withheld because of. (1) defective work not remedied; (2)

failure of contractor to make proper payments to subcontractors, workers, or suppliers; (3) persistent failure to carry out

work in accordance with this Agreement or these general conditions, or (4) legal claims. Final payment will be due after

complete release of any and all liens arising out of the contract or submission of receipts or other evidence of payment

covering all subcontractors or suppliers who could file such a lien. The contractor agrees to indemnify the Owner against

such liens and will refund all monies including costs and reasonable attorney's fees paid by the owner in discharging the

liens. A 10 percent holdback is required by the lender to assure the work has been properly completed and there are no

liens on the property.

10. Protection of Property and Persons: The contractor is responsible for initiating. maintaining, and

supervising all necessary or required safety programs. The contractor must comply with all applicable laws, regulations,

ordinances, orders or laws of federal, state, county or local governments. The contractor will indemnify the owner for all

property loss or damage to the owner caused by his/ her employees or his/her direct or subtier subcontractors.

11. Insurance: The contractor will purchase and maintain such insurance necessary to protect from claims under

workers compensation and from any damage to the owner(s) property resulting from the conduct of this contract.

12. Changes in the Contract: The owner may order changes, additions or modifications (using Fannie form

1200) without invalidating the contract. Such changes must be in writing and signed by the owner and accepted by the

lender. Not all change order requests may be accepted by the lender, therefore, the contractor proceeds at his/her own risk

if work is completed without an accepted change order.

13. Correction of Deficiencies: The contractor must correct promptly any work of his/her own or his/her

subcontractors found to be defective or not complying with the terms of the contract.

14. Warranty: The contractor will provide a one-year warranty on all labor and materials used in the

rehabilitation of the property. This warranty must extend one year from the date of completion of the contract or longer if

prescribed by law unless otherwise specified by other terms of this contract. Disputes will be resolved through the

Construction Industry Arbitration Rules of the American Arbitration Association.

I5. Termination: If the owner fails to make a payment under the terms of this Agreement, through no fault of the

contractor, the contractor may, upon ten working days written notice to the owner, and if not satisfied, terminate this

Agreement. The owner will be responsible for paying the contractor for all work completed. If the contractor fails or

neglects to carry out the terms of the contract, the owner, after ten working days written notice to the contractor, may

terminate this Agreement.

Owner’s Initials: _____ _____ Contractor’s Initials: _____ _____

Contractor’s Resume

Page 1 of 1

Loan #:

Exh 02-410 Rev. 12-17-18

Borrower:

Exhibit 02-410

Contractor’s Resume

Legal Business Name:

Phone:

Fax:

Street:

Form of Business:

Corporation or S-Corp

Sole Proprietorship

Partnership

Limited Liability

Other

City/State/Zip:

Email Address:

Tax ID #:

Principals/Owners:

Name:

Title:

Street Address:

Phone:

City/State/Zip:

Social Security Number

Name:

Title:

Street Address:

Phone:

City/State/Zip:

Social Security Number

Business History

Date Business Started:

Type of Business:

General Contracting Trade Contracting:

Electric Plumbing Heating Roofing Other:

NOTE: Where applicable and mandated by the local municipality, PERMITS are always required prior to the start of any work

Customer References (List individuals M&T may contact as a reference for work you have completed; References MUST be residential work, not commercial)

Name of Customer Address (Street/City/State/Zip) Phone Number

Answer all Questions Below:

1. Are any of your income taxes past due?

YES

NO

2. Have you or any principals of your company, or your company declared bankruptcy?

YES

NO

3. Are there any outstanding judgments or legal actions pending against you or the company?

YES

NO

If any answers were YES, please explain below:

To M&T Bank:

INFORMATION: All information given in this document is true, correct and complete as of the date of this document. I/We authorize you to verify any information given. In

addition, I/we authorize you to obtain any information you feel is necessary or in connection with any review, update, extension or renewal in maintaining an approved status with

M&T. Finally, I/we authorize you to give information about me (us) and your credit experience with me/us to others.

CREDIT REPORTS: I/we understand that you may request a credit report from a credit reporting agency in connection with this document or in connection with any update,

extension or renewal of any credit you extend based upon this document. In

addition, I/we understand that, if asked, you will tell me/us if a credit report was requested, and if so, the name and address of the credit reporting agency furnishing the credit

report. To request the information, I/we should write or call the Construction Lending Department; M&T Bank P. O. Box 4009; Buffalo, New York 14240. (800) 724-6461.

KEEPING RESUME: I/we agree that you may keep this resume’ for your file.

Name of Contractor

By:

Signature and Title

Licenses (

Attach Copies of Licenses Listed Below

)

TYPE:

Electric

Plumbing

Roofing

Other ___________

Municipality Issuing

License:

Major Suppliers (List individuals any major suppliers you have accounts with for a credit rating)

Supplier Name/Material Date Opened High Balance Phone Number

$

Page 13

Page 14

MBank

 



Rehabilitation Loan Permit Certification

   

D 





          

 

D 



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





    

 

   

   



        

 

 

Property Address:

Applicant Name(s):













 

   

   

Please  in the quested ination below, and ew the attached plans specications to

determine if any peits are quid for the outned wo.       

                 



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Page 15

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 1 of 13

FNMA HOMESTYLE SPECIFICATION OF REPAIRS/WORK WRITE UP

Applicant’s Name:

Property Address:

Preparer’s Name/Company Name:

Lender Name:

Loan Number:

Instructions:

• Each item below must be addressed by either filling in the information *OR* by entering “NONE” in the Sub-Total Cost portion if no work is

being done in that section.

• A copy of all estimates from contractors/sub-contractors must be attached, showing labor and materials included

• If structural work is to be undertaken, provide a copy of plans/specs detailing the proposed changes to floorplan/layout, etc.

• Borrowers are not permitted to do any portion of the work themselves; all labor costs must be accounted for

• Transfer all costs from Sub-Total Sections to Exh 03-400 Fnma Draw Request Form

1. MASONRY

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 1:

$

2. SIDING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 2:

$

Page 16

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 2 of 13

3. GUTTERS & DOWNSPOUTS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 3:

$

4. ROOF

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 4:

$

5. SHUTTERS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 5:

$

Page 17

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 3 of 13

6. EXTERIOR

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 6:

$

7. WALKS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 7:

$

8. DRIVEWAYS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 8:

$

Page 18

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 4 of 13

9. PAINTING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 9:

$

10. CAULKING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 10:

$

11. FENCING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 11:

$

Page 20

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 6 of 13

15. DOORS - EXTERIOR

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 15:

$

16. DOORS - INTERIOR

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 16:

$

17. PARTITION WALL

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 17:

$

Page 21

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 7 of 13

18. PLASTER / DRYWALL

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 18:

$

19. DECORATING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 19:

$

20. WOOD - TRIM

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 20:

$

Page 22

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 8 of 13

21. STAIRS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 21:

$

22. CLOSETS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 22:

$

23. WOOD FLOORS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 23:

$

Page 23

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 9 of 13

24. FINISH FLOORS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 24:

$

25. CERAMIC TILE

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 25:

$

26. BATH ACCESSORIES

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 26:

$

Page 24

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 10 of 13

27. PLUMBING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 27:

$

28. ELECTRICAL

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 28:

$

29. HEATING

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 29:

$

Page 25

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 11 of 13

30. INSULATION

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 30:

$

31. CABINETRY

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 31:

$

32. APPLIANCES

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 32:

$

Page 26

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 12 of 13

33. BASEMENTS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 33:

$

34. CLEAN-UP

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 34:

$

35. MISCELLANEOUS

Cost Break Down:

Material

Labor

Total

$

Describe the proposed work and itemize materials to be used:

SUB-TOTAL SECTION 35:

$

Page 27

Ex 03-402 FNMA HomeStyle Specification of Repairs rev. 10-28-2015 Page 13 of 13

RE-CAP of SUBTOTALS

1

Masonry

$

19

Decorating

$

2

Siding

20

Wood Trim

3

Gutters & Downspouts

21

Stairs

4

Roof

22

Closets

5

Shutters

23

Wood Floors

6

Exterior

24

Finish Floors

7

Walks

25

Ceramic Tile

8

Driveways

26

Bath Accessories

9

Painting

27

Plumbing

10

Caulking

28

Electrical

11

Fencing

29

Heating

12

Grading

30

Insulation

13

Windows

31

Cabinetry

14

Weather Stripping

32

Appliances

15

Doors (Exterior)

33

Basements

16

Doors (Interior)

34

Clean Up

17

Partition Walls

35

Miscellaneous

18

Plaster/Drywall

36

TOTAL COST OF REPAIRS

$

Recommended Fees:

The following allowable fees are requested for inclusion on the FNMA HomeStyle Maximum Mortgage Worksheet:

Contingency Reserve Recommendation: 10% 15% 20%

• 10% minimum is required on all projects

• 15% is required if utilities are not on/operational or if property is vacant

• 20% is recommended for prior foreclosure properties

Number of Inspections / Draws Recommended: 1 2 3 4 5

• Non-Structural Projects: maximum of two draws per contractor, up to three contractors

• Structural Projects: up to five draws, regardless of number of contractors

Architectural / Engineering Fees: $

Permits and Other Fees: $ (Explain Below)

Acknowledgements:

_____________________________________ _________________________________

Borrower Signature /Date Co-Borrower Signature/Date

__________

___________________________

Contractor Signature/Date

_____________________________________

Plan Reviewer /Date

Page 28

STEP ONE: BEFORE LOAN APPLICATION

Projected Date:

Borrower assembles all renovation documentation.

Green: Borrower completes

Blue: Contractor completes

Light Green: HUD consultant (if applicable)

completes

Borrower Chooses Contractor(s)

• HUD requires a licensed and experienced

contractor perform all work

Addendum to Home Purchase Contract

• HUD requires that your contract contains specific

203k language or if not, use this addendum

Borrower Acknowledgement

• Check 1 of the 3 boxes and sign

Borrower Identity of Interest

• Check 1 of the 2 boxes and sign

Borrower/Contractor Agreement

• HUD requires that you have a signed agreement

between yourself and your contractor

• You insert the renovation cost in the form, so

this cannot be completed until you and your

contractor (and HUD consultant if applicable)

have agreed on the cost

Contractor Resume

• Contractor also provides a copy of any

applicable licenses and proof of insurance

Permit Certification

• This identifies the number and cost of any

permits required by your municipality

Project Estimate

• If the work is structural OR exceeds $35,000, a

Standard 203k is used. Borrower hires a HUD

Consultant to provide a Specification of Repairs

One general contractor is hired

• Estimate is itemized to match HUD’s

Specification of Repairs. Labor and materials

must be broken out for each HUD line item

• Include renovation work required by HUD Save

time by connecting your HUD consultant and

contractor up front

1

(continued on back)

HUD 203k Renovation Program

• If the work is non-structural and below $35,000,

a Limited 203k is used. The borrower hires 1

general contractor or up to 3 individual

contractors, in which case each must provide a

written estimate, complete the contractor

resume, and provide copies of license and

insurance. You must also have a Borrower/

Contractor Agreement for each contractor

Specification of Repairs (Standard 203k only)

Consultant Identity of Interest (Standard only)

Work Plan (Limited 203k only)

Required by HUD. This can easily be fulfilled using

the contractor’s estimate, which must be signed by

the borrower and contractor, state that the work is

non-structural, be itemized, and showing the labor

and material costs separately for each item.

Another acceptable option is to use the FNMA

Specification of Repairs Form. On the summary

page it must state that the work is not structural

and be signed by both contractor and borrower.

STEP TWO: LOAN APPLICATION

Projected Date:

• Bring all the documentation from Step 1

• Loan Officer provides you with a loan estimate

• Loan Officer sends application to processing

• Appraisal is ordered on your behalf

STEP THREE: LOAN PROCESSING

Projected Date:

Processor will verify all renovation project

documents have been completed, signed, and

that there are no discrepancies in the work

described or the amount estimated across the

following documents:

• Loan Application

• Permit Certification

• Project Estimate

• Borrower/Contractor Agreement

2

3

Page 29

7

• Specification of Repairs or Work Plan

Once the property appraisal is received, your file

will be reviewed by an underwriter.

STEP FOUR: LOAN UNDERWRITING

Projected Date:

• The underwriter reviews the complete loan file,

including project documentation and the

contractor(s) qualifications

• Underwriter verifies that the loan and the

project meet HUD guidelines

NOTE: Most agencies charge a counseling fee,

and an amount up to $500 maybe added

to your Homebuyer Dream Program grant.

STEP FIVE: LOAN APPROVAL

Projected Date:

• Your processor will review the commitment

letter with you regarding any final conditions

for closing

• All conditions must be provided and cleared at

least 3 weeks prior to your target closing date

STEP SIX: LOAN CLOSING

Projected Date:

• Attorney/Settlement agent reviews the loan file,

confirms funds needed to close as well as any

other items needed and schedules the closing

date with you

• If you are refinancing, your permits should be

obtained prior to settlement. If you are purchasing,

you cannot obtain a permit until you are the

owner of the property

NOW YOU ARE READY TO START RENOVATION

STEP SEVEN: RENOVATION

Projected Date:

• You will receive a welcome letter, email and call from

your Draw Administrator within 5 days of closing

6

• Funds will be available for release after this 5 day

period. No funds can be released before this time

• Any required building permits must be in place

before the first draw can be issued

• Within 30 days of closing, HUD requires that the

project start

• HUD requires the project to be completed within

6 months, per the Rehabilitation Loan Agreement

you signed prior to application

STEP EIGHT: MAKING PAYMENTS

• Your first monthly payment will be due on the 1st

of the second full month after closing and then

every month thereafter

• The fully amortizing payments are based on the

entire amount of your loan (including the amount for

renovation) processors during normal working hours

STEP NINE: OBTAINING A DRAW

• When a stage of the plan is complete, call your

Draw Administrator to request a draw

• The Draw Administrator will send an inspector to

confirm the work has been performed according

to the plan

• If the inspection is satisfactory, M&T issues a

check to pay the contractor. It is co-payable to you

and the contractor and sent to you via a 2 day

delivery service

• The draw process is repeated until the project

is complete and the loan is fully disbursed

STEP TEN: PROJECT COMPLETION

• A final inspection and title update is obtained by

the Draw Administrator

• If applicable, a Certificate of Occupancy/final

municipal inspection may be required for any

permits previously issued

4

5

Equal Housing Lender.

46919 200715 VF

10

8

9

For more information, contact M&T Bank tod

a

y.

Name, NMLS#

Title

Phone

Email

Page 30

ref. Handbook 4240.4 form

HUD-92700-A

(8/95)

U.S. Department of Housing

and Urban Development

Office of Housing

Federal Housing Commissioner

203 (k) Borrower's

Acknowledgement

This statement must be delivered to you prior to closing the loan. Return one copy to your lender as proof you have read the entire document. Keep

one copy for your records. You, the borrower(s), must be certain that you understand this information. Sign here only after you have read this entire

document. Seek professional advice if you are uncertain.

Borrower’s Signature & Date: Co-Borrower’s Signature & Date:

X X

I, the lender, certify this information was delivered to the borrower(s) prior to the time of loan closing.

Lender’s Signature & Date:

X

Loan Requirements

• I understand at the time of the loan closing of an FHA-insured 203(k)

Rehabilitation Loan, for which I have applied to my lender, the proceeds

designated for the rehabilitation or improvement (including a contingency

reserve, mortgage payments and any other fees, where applicable) are to be

placed in an interest bearing escrow account. The Rehabilitation Escrow

Account is not, nor will it be treated as an escrow for the paying of real estate

taxes, insurance premiums, delinquent notes, ground rents or assessments.

I hereby request the lender, after the Final Release Notice is issued, to:

Pay the net interest income directly to me/us.

Apply the net interest income directly to the mortgage principal balance

for an equal amount of principal reduction.

Other: _________________________________________________

• I understand that the Rehabilitation Escrow Account will cease paying

interest to me if (1) the loan payments are delinquent for more than 30 days;

or (2) the completion date (or an approved extension) has expired. During

this period, the interest will be paid down on the mortgage principal. I

understand if I clear up the delinquent or default status and/or the comple-

tion date has not expired or an extension has been approved, then the interest

on the escrow account will begin again to be paid according to the request

above.

• I understand no draws on the escrow account can be made until all permits

have been issued by the local or state building departments, where required.

I further understand I can only request monies for the actual cost of

rehabilitation. If any cost savings result on any line item of the Draw

Request, form HUD-9746-A, the amount saved must be used to: (1) Make

further improvements to the property; (2) Pay for cost overruns in other line

items of the Draw Request; or (3) Prepay the mortgage principal.

• I understand the contractor(s) is responsible to complete the work described

in the architectural exhibits in a workmanlike manner. If I agree the work

has been properly completed, I will sign the Draw Request, form HUD-

9746-A, thereby accepting the responsibility that the completed work is

acceptable and payment is justified. I understand there is a 10 percent

holdback on each Draw Request to assure the work is properly completed

and for lien protection.

• I understand I am responsible to negotiate any and all agreements with the

contractor(s) I select and that HUD suggests that the Agreement with the

contractor should include a provision for binding arbitration with the

American Arbitration Association on any dispute.

• I understand if I am using the Escrow Commitment Procedure, I must sign

form HUD-314. The funds deposited in an escrow, trust or special account

will not be released until an assumption of the loan occurs by a creditworthy

buyer or until the time allowed for such assumption has expired, thereby

requiring the funds to be paid down on the mortgage principal.

• I understand if I change a contractor for any reason, I may be obligated under

the terms of the original contractor’s agreement and I should seek legal

advice before taking such action. If I disagree with the contractor regarding

the acceptable completion of the work, I can request an inspection by the

fee inspector to determine if the work has been properly completed. If an

agreement cannot be made with the contractor, the lender may hold the

money until such time as an agreement is reached or an arbitrator’s decision

is rendered.

• I understand the lender or HUD does not provide a one-year warranty on the

completed work on the property. I am responsible to obtain such

warranty(s) from the contractor(s) and the warranty should be stated in the

Homeowner-Contractor Agreement.

• I understand I am responsible to make the mortgage payments during the

term of the loan, including the rehabilitation period, to ensure the property

will not go into default. The construction on the home must start within 30

days; if the construction ceases for more than 30 days, the lender may

consider the loan in default or the lender can use the escrow money to have

the work completed. If the work stops or is not progressing as it should, or

if the work does not comply with the accepted architectural exhibits, the

lender may require additional compliance inspections to protect the secu-

rity of the loan and I will be responsible to pay for the inspections and the

cost of the inspection may be withheld at the next draw request.

• I understand no changes to the architectural exhibits can be made without

the acceptance of the lender (or HUD) on form HUD-92577. The contin-

gency fund is set up for changes that affect the health, safety, or items of

necessity of the occupants of the property. If the contingency reserve is

insufficient, I must place additional monies into the account for payment

upon acceptance of the change. Additional improvements can be made after

it is determined no further health and safety items exist. A change order will

be made to assure the monies are available to the contractor upon comple-

tion of the changed work.

• I understand if there are unused contingency funds, mortgage payments,

inspection fees or other monies in the Rehabilitation Escrow Account after

the Final Release is processed, the lender, in compliance with HUD

regulations, must apply those funds to prepay the mortgage principal,

provided those items are a part of the mortgage.

• I understand the lender may retain the 10 percent holdback, for a period not

to exceed 35 days (or the time period required by law to file a lien,

whichever is longer), to ensure compliance with state lien waiver laws or

other state requirements. Upon completion of the work, I understand I will

be provided: (1) The Final Draw Request; (2) The Final Release Notice;

and (3) An accounting of the final distribution of all funds.

Condition of Property: I understand that the property I am purchasing is not

HUD approved and HUD does not warrant the condition or the value of the

property. I understand the HUD plan review (where performed) and the

appraisal are performed to determine compliance with the required architectural

exhibits and to estimate the value of the property, but neither guarantees the house

is free of defects. I understand I was responsible to have an independent consultant

and/or a professional home inspection service perform an inspection of the property

and the cost of the inspection was (or could be ) included in the mortgage.

Form 2403 203K Borrower's Acknowledgement

Page 31

1

FHA 203(k) Home Owner - Contractor Agreement (9-2016)

Loan #:

Borrower:

Borrower (Owner) Name(s):

FHA Case No:

Address:

City: State: Zip Code:

Telephone

Work:

Home:

Contractors Name:

Address:

City: St: Zip Code:

Telephone:

Work: Cell:

THIS AGREEMENT (three pages) made this date,

, between the above

mentioned Borrower (Owner) and Contractor, is for the rehabilitation of the property located at

that has been ap

proved

for FHA mortgage insurance under Section 203(k) of the National Housing Act. The Owner(s) shall pay the

Contractor the sum of $

for completion of the work, including all sales tax due

by law, together with such increases or decreases in the contract price as may be approved in writing by the

Lender. The work will begin within 30 days of loan closing with the Lender and will be completed no later

than

, unless delayed beyond the Contractor’s control. The General

Provisions listed below are made a part of this Agreement. The contract documents consist of the

architectural exhibits listed in the Rehabilitation Loan Agreement between the Owner(s) and the Lender, or

as described below (or on an attached sheet):

1. Contract Documents: This Agreement includes all general provisions, special provisions and architectural exhibits

that were accepted by the lender. Work not covered by this agreement will not be required unless it is required by

reasonable inference as being necessary to produce the intended result. By executing this Agreement, the

contractor represents that he/she has visited the site and understands local conditions, including state and local

building regulations and conditions under which the work is to be performed.

2. Owner: Unless otherwise provided for in the A

greement, the owner will secure and pay for necessary easements,

exceptions from zoning requirements, or other actions which must precede the approval of a permit for this project.

If owner fails to do so then the contract is void. If the contractor fails to correct defective work or persistently fails to

carry out the work in accordance with the agreement or general provisions, the owner may order the contractor

in writing to stop such work, or a part of the work, until the cause for the order has been eliminated.

Borrower’s Initials:

Co

ntractor’s Initials:

-Continued on Page Two-

BORROWER/CONTRACTOR AGREEMENT

FHA 203(k) Rehabilitation Program

Page 32

2

FHA 203(k) Home Owner - Contractor Agreement (9-2016)

Loan #:

Borrower:

3. Co

ntractor: The contractor will supervise and direct the work and the work of all subcontractors. He/she will use

the best skill and attention and will be solely responsible for all construction methods and materials and for

coordinating all portions of the work. Unless otherwise specified in the Agreement, the contractor will provide for

and/or pay for all labor, materials, equipment, tools, machinery, transportation, and other goods, facilities, and

services necessary for the proper execution and completion of the work. The contractor will maintain order and

discipline among employees and will not assign anyone unfit for the task. The contractor warrants to the owner

that all materials and equipment incorporated are new and that all work will be of good quality and free of defects

or faults. The contractor will pay all sales, use and other taxes related to the work and will secure and pay for

building permits and/or other permits, fees, inspections and licenses necessary for the completion of the work

unless otherwise specified in the Agreement. The contractor will indemnify and hold harmless the owner from and

against all claim, damages, losses, expenses, legal fees or other costs arising or resulting from the contractors

performance of the work or provisions of this section. The contractor will comply with all rules, regulations, laws,

ordinances and orders of any public authority or HUD inspector bearing on the performance of the work. The

contractor is responsible for, and indemnifies the Owner against, acts and omissions of employees, subcontractors

and their employees, or others performing the work under this Agreement with the contractor. The contractor will

provide shop drawings, samples, product data or other information provided for in this Agreement, where

necessary.

4. Subcontractor: Selected by the contractor, except that the contractor will not employ any subcontractor to whom

the owner may have a reasonable objection, nor will the contractor be required by the owner to employ any

subcontractor to whom the contractor has a reasonable objection.

5. Work by Owner or Other C

ontractor: The owner reserves the right to perform work related to the project, but which

is not a part of this Agreement, and to award separate contracts in connection with other portions of the project not

detailed in this Agreement. All contractors and subcontractors will be afforded reasonable opportunity for the

sto

rage of materials and equipment by the owner and by each other. Any costs arising by defective or ill-timed

work will be borne by the responsible party.

6. Binding Arbitration: C

laims or disputes relating to the Agreement or General Provisions will be resolved by the

Construction Industry Arbitration Rules of the American Arbitration Association (AAA) unless both parties mutually

agree to other methods. The notice of the demand for arbitration must be filed in writing with the other party to this

Agreement and with the AAA and must be made in a reasonable time after the dispute has arisen. The award

rendered by the arbitrator(s) will be considered final and judgment may be entered upon it in accordance with

applicable law in any court having jurisdiction thereof.

7. Cleanup and Trash Removal: The contractor will keep the owner’s residence free from waste or rubbish resulting

from the work. All waste, rubbish, tools, construction materials, and machinery will be removed promptly after

completion of the work by the contractor.

8. Time: W

ith respect to the scheduled completion of the work, time is of the essence. If the contractor is delayed at

anytime in the progress of the work by change orders, fire, labor disputes, acts of God or other causes beyond the

contractor’s control, the completion schedule for the work or affected parts of the work may be extended by the

same amount of time caused by the delay. The contractor must begin work no later than 30 days after loan

closing and will not cease work for more than 30 consecutive days.

9. Payments and Completion: P

ayments may be withheld because of (1) defective work not remedied; (2) failure of

contractor to make proper payments to subcontractors, workers, or suppliers; (3) persistent failure to carry out

work in acceptance with this Agreement or these general conditions, or (4) legal claims. Final payment will be due

after complete release of any and all liens arising out of the contract or submission of receipts or other evidence of

payment covering all subcontractors or suppliers who could file such a lien. The contractor agrees to indemnify

the Owner against such liens and will refund all monies including costs and reasonable attorney’s fees paid by the

owner in discharging the liens. A 10 percent holdback is required by the lender to assure the work has been

properly completed and there are no liens against the property.

Borrower’s Initials:

Co

ntractor’s Initials:

-Continued on Page Three-

Page 33

3

FHA 203(k) Home Owner - Contractor Agreement (9-2016)

Loan #:

Borrower:

10. Protection of Property and Persons: The contractor is responsible for initiating, maintaining, and supervising all

necessary or required safety programs. The contractor must comply with all applicable laws, regulations,

ordinances, orders or laws of federal, state, county or local governments. The contractor will indemnify the owner

for all property loss or damage to the owner caused by his/her employees or his/her direct or subcontractors.

11. Insurance: The contractor will purchase and maintain such insurance necessary to protect from claims under

workers compensation and from any damage to the owner(s) property resulting from the conduct of this contract.

12. Changes in the Contract: The owner may order changes, additions or modifications (using form HUD-92577)

without invalidating the contract. Such changes must be in writing and signed by the owner and accepted by the

lender. Not all change order requests may be accepted by the lender, therefore, the contractor proceeds at his/her

own risk if work is completed without an accepted change order.

13. Correction of Deficiencies: The contractor must correct promptly any work of his/her own or his/her subcontractors

found to be defective or not complying with the terms of the contract.

14. Warranty: The contractor will provide a one-year warranty on all labor and materials used in the rehabilitation of

the property. This warranty must extend one year from the date of completion of the contract or longer if

prescribed by law unless otherwise specified by other terms of this contract. Disputes will be resolved through the

Construction Industry Arbitration Rules of the American Arbitration Association.

15. Termination: If t

he owner fails to make a payment under the terms of this Agreement, through no fault of the

contractor, the contractor may, upon ten working days written notice to the owner, and if not satisfied, terminate

this Agreement. The owner will be responsible for paying the contractor for all work completed. If the contractor

fails or neglects to carry out the terms of the contract, the owner, after ten working days written notice to the

contractor, may terminate this Agreement.

Borrower Signature:

Dat

e:

Borrower Signature: Date:

Co

ntractor Signature:

Dat

e:

Page 34

FHA 203(k) Addendum to Purchase Contract

Purchase Contract dated between

Buyer(s):

and

Seller(s):

is hereby amended to include the following language:

“Buyer has applied for Section 203(K) financing, and this contract is contingent

upon mortgage approval and the Buyer’s acceptance of additional required

repairs as determined by the lender.”

_________________________________ _______________

Buyer Date

_________________________________ _______________

Buyer Date

_________________________________ _______________

Seller Date

_________________________________ _______________

Seller Date

Page 35

Borrower' s Identity-of-Interest Certification

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).

Borrower' s Name(s):

Property Address:

Date:

Home:

Borrower

-601

(0008).01

VMP Mortgage Solutions (800)521-7291

7/00

Borrower

Telephone Number: Work: FHA Case No.:

occupy the residence I/We are purchasing orwill not

Borrower

Date:

Borrower

Date:

(lender), that I/We do not have an identity-of-interest with the seller of the property. I also Certify that I/We do not have a

conflict-of-interest with any other party to the transaction, including the realtor, lender, contractor, consultant and/or the

appraiser. In addition, I certify that I am not obtaining any source of funds or acting as a "strawbuyer" for another individual,

partnership, company or investment club and I/We will

refinancing."

"I hereby certify to the Department of Housing and Urban Development (HUD) and