-
GCA Forums Headline News for Friday March 21 2025
Headline News Summary for GCA Forums News on Friday, March 21, 2025-Real Estate Trends and Housing Market Analysis
In our review dated March 21, 2025, the snapshot recovery of the U.S. real estate market still appears to be contingent on economic activity, mortgage rates, available housing, and other competitive macroeconomic factors. The robust demand for single-family homes has not waned, and many prospective sellers still wish to take advantage of the current market. At the same time, there is a clear improvement in the supply of homes, which should gradually stabilize home prices in the next few months. In addition, there is renewed buyer interest in metropolitan areas fueled by remote work policy changes that motivate people to buy homes with more living space and amenities.
Overall Trends For Interest Rate And Mortgages
There is a slight increase in mortgage rates, with the 30-year fixed mortgage rate at approximately 5.2%. This change is due to the recent steps taken by the Federal Reserve on interest rates. The central bank has signaled that additional increases are likely coming as part of their efforts to control high inflation rates. During this period, potential homebuyers are acting more cautiously. Moreover, there has been an increased shift towards adjustable rate mortgages (ARMs) as borrowers try to take advantage of lower starting rates during economic uncertainty.
What’s Happening Economically
The wider economic area shows some signs of optimism. The Gross Domestic Product (GDP) is expected to be around 2.5% in the first quarter of 2025. This positive increase is owing to the surge in consumer activity and the strong recovery of the manufacturing industry. Still, inflation remains an ever-present issue, having increased by 3.4% on a year-over-year basis in the Consumer Price Index (CPI). To that end, the Federal Reserve is considering tighter monetary policy options in light of these inflationary pressures.
Employment Situation
The unemployment rate is 4.1%, indicating no movement on the labor market front. Recently, employment gains have been especially strong in services and other expanding sectors such as IT and Healthcare. On the bright side, there are still some opportunities in the job market, but some industries are facing a lack of skilled workers, which can be detrimental to the economy’s growth.
Federal Reserve Board Actions
During the last policy meeting, the Federal Reserve Board highlighted the need for caution when changing interest rates. As inflation continues to be an issue, the Fed will likely stay on high alert, watching closely and waiting to make decisions on employment data and other economic measures that will be important down the line.
Imbalance Between Housing Inventory and Demand
The imbalance between the inventory of houses and buyers’ demand continues to be an issue in the market. Despite the recent uptick in new construction, many areas remain seller’s markets. Builders are trying to increase the supply, but it does not meet the demand of first-time home buyers and other real estate investors. With time, experts believe that as there is more supply, there is hope for a shift to a more favorable market for buyers.
Analysis of DJIA and Precious Metal Prices
The DJIA has shown notable fluctuations lately, recently closing at around 34.5K points. This indicates investors’ worrying sentiment about probable future interest hikes and the overall inflation rate. Additionally, there has been growing interest in gold, with a price tag of approximately $2.05k per ounce, alongside silver since these are viewed as safe-haven assets during turbulent market conditions.
Other Market Insights
Along with stock and precious metal market changes, the bond market’s yields have fluctuated as investors evaluate the Federal Reserve’s monetary policy decisions. At the same time, the commercial real estate industry is strong, particularly in logistics and warehousing, because of the sustained growth of e-commerce.
Overview of the Mortgage Industry
The entire mortgage industry is trying to cope with the new economic facts. Most lenders are shifting their attention toward a broader market by including diverse options like FHA, VA, and USDA loans. Although the refinance market continues to be active, there has been a drop in new purchase mortgages due to increasing interest rates.
Mortgage Lending and Loans Program
- Mortgage interest rates
- Mortgages with fixed rates
- Mortgages (ARMs) with adjustable rates
- FHA Loans
- VA Loans
- USDA Loans
- Refinancing a mortgage
- Programs for first-time homebuyers
- Jumbo Loans
- Conventional Loans
- Non-QM Loans
- Assistance with down payment programs
As of March 21, 2025, the national economic outlook operates under increasing interest higher than the previously forecasted level, with inflation still being a risk. The labor market remains strong, severely impacting the real estate and mortgage markets. The ongoing processes related to the availability of housing stock and the willingness of buyers to purchase houses will likely continue dominating the market in the next few months. These trends will pose difficulties and new possibilities for other businesses within the real estate market.
-
2 Replies
-
A HUD-approved General Contractor must complete several steps before receiving the title. These steps must be fulfilled for the FHA 203k loans, which are meant for the renovation/restructuring of single-family units. This is how a general contractor can get HUD approved:
Acquiring HUD Approval Steps
Getting Familiar With FHA 203k Program:
- Make sure you review the documents associated with the FHA 203k loan program.
- Learn about the existing types (standard and limited), the scopes allowed, and the contractor-associated requisites.
Qualifications and Prior Experience:
- Make sure you list all the pertinent areas of the FHA 203k projects and have the required experience (rehabilitation and new construction).
- Working in these specific areas is very important and a prerequisite.
Certificates And Licensing
Contractor’s License:
- You must get licensed in each state you work in (Indiana, Illinois, Wisconsin, and Michigan).
- These states have distinct guidelines for contract work.
Insurance:
- Get proper insurance coverage.
- The insurance types required include general liability, worker’s compensation, and builder’s risk insurance.
Become a Member of Professional Groups
- Membership in reputable contracting or construction organizations can also benefit you.
- Organizations like the National Association of Home Builders (NAHB) and other bordering state associations can provide much-needed support.
Training for Consultants of 203k HUD
- There are several reasons why contractors benefit from the role of a 203k consultant, even if they are not required to take up the role.
- Quite several consultants also do contract work.
Registration with HUD
You need to register with HUD as a 203k consultant or contractor.
- Registration implies: Fill in all requisite forms over the HUD Addendum to the Contractor’s Proposal for every project you bid.
- Submission of references from previous employers or clients.
- Business and license information for bidding needs to be submitted.
Documentation that demonstrates skills must be prepared:
- Project portfolios
- Employer references
- Proof of being licensed and insured
- Other proof of sufficient credit history may be required to prove the contestant’s stable finances.
Application process:
- While there isn’t a conventional way of applying for the status of a contractor the same way lenders would, some requirements need to be met.
- Work with FHA-approved lenders as consultants since they place requirements on filling the documents listed above for every project.
- Compliance with other federal, state, and municipal business laws and core organizational policies is necessary.
Training and education:
- Invite any offered training and education courses webinars with HUD and sister institutions on anything related financially to FTA.
Networking
- Lenders, consultants, and real estate agents are directly involved with FHA 203K loans.
- Building a rapport with them can land you in their good books, which can benefit you.
Feedback and Performance
- Your performance will be reviewed based on your work on the FHA 203K projects.
- The timelines you meet, the quality of your work, and how strictly you follow the loan terms will all impact the award of these projects later on.
Stay Compliant
- All construction activities must meet HUD requirements, including using subcontractors and materials and adhering to local building codes, budgets, and timelines.
Following these guidelines can help a General Contractor target Indiana, Illinois, Wisconsin, or Michigan. Just be mindful that multiple vetting for each project is expected. Still, this will become easier as you build your reputation and network.
-
To become a HUD-approved general contractor capable of working on FHA 203k loans in Indiana, Illinois, Wisconsin, and Michigan, your experience as a general contractor with a broad range of skills:
- Gut and Rehab
- New Construction
- Kitchens
- Bathrooms
- Concrete
- Plumbing
- Electrical
- Roofing
- Siding
- Carpentry
- Masonry
- Gutters
- Soffits
- Fascia
- Small and
- Large Projects—position you well.
However, HUD does not directly “approve” general contractors for FHA 203k loans, as it does for consultants or lenders.
Instead, contractors must meet specific qualifications and often work through a certification process recognized by lenders and aligned with FHA 203k guidelines.
Here’s how you can proceed:
Understand FHA 203k Loan Requirements.
- The FHA 203k loan program (both Standard and Limited versions) allows borrowers to finance the purchase or refinance of a home plus the cost of its rehabilitation.
Contractors working on these projects must:
- They must be licensed, bonded, and insured in the states where they operate (Indiana, Illinois, Wisconsin, and Michigan, in your case).
- Demonstrate experience and competency in rehabilitation work, as lenders will vet contractors before approving them for a specific 203k project.
- Follow HUD guidelines, including providing detailed bids, adhering to timelines (typically 6 months for completion), and working with a HUD-approved 203k consultant (required for Standard 203k loans).
- You’re starting from a strong foundation since you already have extensive experience in relevant areas.
- The key is formalizing your qualifications for the 203K program.
Meet State Licensing and Insurance Requirements
Each state has its own contractor licensing requirements:
Indiana:
- No state-level general contractor license is required, but local jurisdictions may require permits or licenses for specific trades (e.g., plumbing, electrical).
- Ensure you have a valid business license and proper insurance (general liability and workers’ compensation).
Illinois:
- There is no state-wide general contractor license, but certain trades (e.g., roofing, plumbing, and electrical) require specific licenses.
- Chicago and other municipalities may have additional requirements.
- Liability insurance is critical.
Wisconsin:
- General contractors need a dwelling contractor qualifier certification from the Department of Safety and Professional Services, plus registration as a business.
- Trade-specific licenses may also apply.
Michigan:
- Requires a Residential Builder’s License from the Department of Licensing and Regulatory Affairs (LARA) for residential work, which aligns with 203k projects.
- You’ll need to pass an exam and maintain insurance.
Action:
- Verify that your licenses and insurance meet the requirements in all four states where you plan to operate.
- Lenders will check these credentials for each $3,000 project.
Gain 203k-Specific Knowledge
While HUD doesn’t maintain a list of approved contractors (a practice discontinued in 1995), lenders require contractors to understand the 203k process, including:
- Preparing detailed work write-ups and cost estimates.
- Coordinating with HUD-approved 203k consultants (for Standard 203k loans).
- Manage draw inspections and adhere to FHA Minimum Property Standards (MPS).
Action:
- Educate yourself on the FHA 203k Rehabilitation Mortgage Insurance Program.
- You can review HUD’s guidelines online (e.g., HUD Handbook 4000.1) or take a structured course.
Pursue Certification (Recommended)
- A widely recognized option is to become a **Certified 203k Contractor** through a program like 203kContractors.com.
- This isn’t a HUD requirement but is a standardized way to demonstrate expertise and get listed in directories used by borrowers, realtors, and lenders.
Steps include:
Eligibility:
- You need at least 3 years of experience as a general contractor (which you have) and a clean record (no listing on HUD’s Limited Denial of Participation List, GSA’s System for Award Management, or Credit Alert Verification Reporting System).
Education:
- Complete the 203k Contractor Education Course ($975 as of recent updates), which covers the latest FHA 203k rules (updated November 4, 2024).
- The course takes 10-15 hours and requires an 80% passing grade.
Certification:
- Once completed, your company earns the Certified 203k Contractor designation, and you’re added to their directory, increasing visibility to clients seeking 203k contractors in your states.
Ongoing Education:
- Free quarterly updates (45 minutes each) are required to maintain certification.
Action:
- Enroll in the 203k Contractor Education Course to gain formal accreditation and market yourself effectively.
Build Relationships with FHA-Approved Lenders
Lenders, not HUD, approve contractors for individual 203k projects.
They’ll review you:
- Licenses, insurance, and bonding.
- References and past work experience.
- Understanding of the 203k process.
Action:
- Network with FHA-approved lenders in Indiana, Illinois, Wisconsin, and Michigan specializing in 203k loans.
- Provide a portfolio of your rehab and construction projects to showcase your expertise.
- Ask to be added to their contractor lists.
Partner with HUD-Approved 203k Consultants
- For Standard 203k loans, a HUD-approved consultant oversees the project, prepares the work write-up, and conducts inspections.
- Your ability to collaborate with them is essential.
Action:
- Connect with consultants in your target states via HUD’s 203k Consultant Roster (searchable online at hud.gov).
- Please familiarize yourself with their expectations to streamline project approvals.
Market Yourself as a 203k Contractor.
Once certified and equipped with the necessary knowledge, promote your services:
- Highlight your experience with gut rehabs, new construction, and specific trades relevant to 203k projects.
- Use your Certified 203k Contractor status (if pursued) in marketing materials.
- Join local real estate networks to connect with buyers and realtors familiar with fixer-uppers.
Action:
- Update your website, business cards, and online profiles to emphasize your readiness for FHA 203k projects across the four states.
- Lenders handle that per project.
- You don’t need direct HUD approval as a general contractor for 203k loans.
- However, to position yourself effectively:
- Ensure licensing and insurance compliance in Indiana, Illinois, Wisconsin, and Michigan.
- Gain 203k expertise through self-study or certification (e.g., Certified 203k Contractor program).
- Build relationships with FHA lenders and 203k consultants.
- Market your extensive experience to attract 203k clients.
- With your background, completing a certification course and networking with key players will fast-track your ability to take on FHA 203k projects in these states.
Start by confirming your state-specific credentials and exploring the certification option to stand out in the market.
https://mortgagelendersforbadcredit.com/fha-203k-loans/
mortgagelendersforbadcredit.com
FHA 203K Loans - Mortgage Lenders For Bad Credit
An FHA 203k Loans are an acquisition and construction loan that is combined as a one loan package: