On most FHA 203(k) loans the lender requires an FHA-approved consultant. Dan’s role is to act as the independent, unbiased third-party expert that protects everyone involved by making sure the renovation meets FHA Minimum Property Standards and stays on budget.
Why the Consultant Is Required?
HUD requires an independent, unbiased third-party expert to ensure renovation funds are spent correctly and the finished home meets safety and soundness standards.
These are the maximum fees HUD permits for FHA 203(k) consulting services (Mortgagee Letter 2024-13, effective for cases closed on or after November 4, 2024). Many fees can be financed into the loan.
| Service | Maximum Allowable Fee |
|---|---|
| Feasibility Study (if requested) | $375 |
| Work Write-Up & Review of Architectural Exhibits |
• Up to $1,000 for repairs ≤ $50,000 • Up to $1,200 for repairs $50,001–$85,000 • Up to $1,400 for repairs $85,001–$140,000 • Up to 1% of repair costs or $2,000 for repairs > $140,000 • Additional $25 per additional dwelling unit |
| Mileage Fee | IRS mileage rate when consultant’s place of business is > 15 miles from the property |
| Draw inspections (each) | Up to $375 (per HUD ML 2024-13) |
| Change orders (each) | Up to $120 (per HUD ML 2024-13) |
| Re-inspections (each) | Up to $225 (per HUD ML 2024-13) |
Fannie Mae HomeStyle Renovation Loans
HomeStyle loans follow a similar fee schedule until rehab amounts exceed $350,000.
For repairs over $350,000 an additional $500 is added per $500,000 increment:
Source: HUD Mortgagee Letter 2024-13 (effective Nov 4, 2024) + current industry practice for HomeStyle