All renovation work must be performed by a licensed contractor or subcontractor, unless contractor licensing is not applicable under state or local law for the specific trade or type of renovations being performed.
The borrower must choose the contractor to perform the needed renovation, subject to the lender’s determination that the contractor is
- qualified and experienced,
- has all appropriate credentials required by the state,
- is financially able to perform the duties necessary to complete the renovation work in a timely manner, and
- agrees to indemnify the borrower for all property losses or damages caused by its employees or subcontractors
The lender may not choose the contractor or refer the borrower to any one specific contractor. However, the lender may require the borrower to obtain a completed Contractor Profile Report (Form 1202)* from the contractor that is selected to ensure that the lender has sufficient information available to make a determination about the contractor’s qualifications.
The borrower may also complete repairs under the “Do It Yourself” option described in B5-3.2-02, HomeStyle Renovation Mortgages: Loan and Borrower Eligibility.
For additional information, see B5-3.2-03, HomeStyle Renovation Mortgages: Collateral Considerations.
*For a complete list of forms used in fulfilling requirements contained in the Selling and Servicing Guides, see the Guide Forms page.