HUD Inspection Fees

[Scott Martin]

Could someone that does HUD Inspections tell me about how much the HUD Inspection fees pay. Would Jacksonville, FL be a good place to do these inspections or is it only possible to make a living traveling the US? I am talking about the HUD Inspections that require the DC training.

I currently do risk assestments for insurance companies as a subcontractor and have completed about 100 of these mostly commercial properties for one client and I have done about 40 for another. Some were for banks or mortgage holders.

Your help is appreciated as I am trying to get some direction.

[Nolan Kienitz]

Scott,

If you are talking about the HUD 203k Consultant program ...

First you have to be on the roster as a 203k consultant with HUD and I "think" they are not currently adding any at this time. HUD has recently purged their list of 203k consultants and had put a hold on any additions for some time frame. They may have lifted that, but I was advised of this just about a month ago.

The fee schedule for the 203k consultant is published at the HUD website. I've also been told they are reviewing the schedule for 'possible' changes to more current/relevant rates.

Read through Section or Graf I at the URL below and you will see the HUD 203k Fee Structure.

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/95-40ml.txt

If you read through this HUD Letter 95-40 you will see what the 203k Consultant is required to do ... toward the end of the file.

[Scott Patterson]

Could someone that does HUD Inspections tell me about how much the HUD Inspection fees pay. Would Jacksonville, FL be a good place to do these inspections or is it only possible to make a living traveling the US? I am talking about the HUD Inspections that require the DC training.

I currently do risk assestments for insurance companies as a subcontractor and have completed about 100 of these mostly commercial properties for one client and I have done about 40 for another. Some were for banks or mortgage holders.

Your help is appreciated as I am trying to get some direction.

I think that you are talking about the HUD REACT inspections. This is an inspection of HUD subsidised housing. Most of it is controled by a few major contractors who bid on the work and then job it out. Some individual inspectors also bid on the work in their areas. Last I heard the bids were going for as low as $40 per unit. So if you have a 100 unit complex you could see how this could add up, it is all based on volume.

[Scott Martin]

Thanks Scott,

Yes, I mean the HUD REACT inspections. Do you think Jacksonville, FL would be a decent place to run such a business?

At the moment things are slow where I am in Louisiana and I want to relocate to NE Florida. I believe I have to have completed about 260 inspections before I can be considered for the 5 day training in DC and I am about half way there.

You believe an inspector can make a decent living doing these then, perhaps along with other types of inspections, correct? I am trying to get a feel for earnings expectations.

Is the testing hard?

[Scott Patterson]

Thanks Scott,

Yes, I mean the HUD REACT inspections. Do you think Jacksonville, FL would be a decent place to run such a business?

I have no idea, I live in Tennessee.


At the moment things are slow where I am in Louisiana and I want to relocate to NE Florida. I believe I have to have completed about 260 inspections before I can be considered for the 5 day training in DC and I am about half way there.

You believe an inspector can make a decent living doing these then, perhaps along with other types of inspections, correct? I am trying to get a feel for earnings expectations.

It all depends on how many inspections you can do and what your overhead cost are going to be.



Is the testing hard?

I have no idea, I have never taken their test. Having seen a few folks that are doing REACT inspections, I would not think that the testing would be that difficult if you pay attention in the class.

Personally I would concentrate on basic home inspections. Work on building up your name in your community. You will make a great deal more doing basic home inspections and you will have less headaches.

[Patrick Pisani]

Hi, Im a relatively new inspector and just wanted to know if anyone is doing construction loan draw inspections for the banks,and if so what is the going fees. Any help would be greatly appreciated.
Thanks for all the good info. in the past year.I've picked up a lot from the site.
Thanks Again
Pat

[Scott Patterson]

Hi, Im a relatively new inspector and just wanted to know if anyone is doing construction loan draw inspections for the banks,and if so what is the going fees. Any help would be greatly appreciated.
Thanks for all the good info. in the past year.I've picked up a lot from the site.
Thanks Again
Pat

Yes, draw inspection can be a good source of additional income. You just have to be smart when you do them. I have seen a dramatic decrease in draw inspections over the past 6 months. The ones I'm doing now are for mostly high end custom homes. When builders are not building the draw inspections decrease. Most residental draws pay around $50 to $75 sometimes higher depending on the property. Remember that the cost of the draw is passed onto the borrower.

[Jim McMillan]

Scott - I performed inspections for the HUD REAC (Real Estate Assessment Center) through a contractor for three years (late 90's, early 2000). I am in rural NC and was asked to travel in multiple locations including ND, KY, AL and a two week trip starting in coastal VA up to Philly and then back down the DelMarVa peninsula. When I decided to stop contracting to do these inspections there was a program being initiated which was called a "reverse auction" where the person / contractor bidding the lowest to perform the inspections was awarded a contract. Where I live, and accounting for the travel, this became a liability rather than an asset.

Having said this if, IF, you can remain in your home state, especially in the larger metropolitan areas, you may be able to make good money. Be warned, though, that the training is extensive, you will be audited once or twice a year (or more - not fun), and the pay is not per unit (unless there has been a change), but per property inspected. The number of units inspected per property is (again, may have changed) determined on a sliding scale depending on the total number of units in a specific property. At the time I was inspecting no one, by REAC directive, could inspect more than two properties a day. And that was often a stretch. Fees at the time I was inspecting were generally in the $175 - $240 range per property depending on the contractor and the accepted bid. Again, my experience with REAC was several years ago and there may have been significant changes. I suggest that you research the HUD / REAC website, Real Estate Assessment Center (REAC) - HUD (http://www.hud.gov/offices/reac/) for information. There are phone numbers available if you have additional questions.

Jim McMillan
HRI, Inc.

"You Have The Right To Know!!"

[Bryan Madison]

I am certified for HUD REAC inspections and currently getting occasional work. I just found this website today. I came here searching for info on FHA inspections, and now I found a topic where I can contribute some useful info from first hand experience.

You can get REAC inspection work from 2 main sources.
1. Inspections auctioned to eligible contractors in the HUD REAC RAP (Reverse Auction Program)
2. Inspections contracted from servicing mortgagees (inspections for companies that service HUD insured mortgages.)

The fees in either case typically pay close to $300 per inspection day. That is about 8 hours at the inspection site. There is no pay for time spent on general business activities such as scheduling, reviewing, uploading, downloading and archiving inspections, maintaining computers or dealing with arbitrary HUD requirements or dealing with contractors. REAC Inspectors are independent contractors and have to pay their own expenses for travel and a computer with enough battery power for a full day of field inspection work. Sometimes inspections get cancelled, and you lose the job and the income. HUD requires all RAP contractors and inspectors to purchase a $2,000,000 general liability insurance policy with HUD named as certificate holder. As an independent contractor you receive no benefits other than the fees per inspection.

The RAP works like an EBAY auction where HUD REAC RAP qualified contractors bid in a live auction to drive the inspection prices down. The RAP is usually held on a Saturday from 10am-4pm EST. Sometimes there are no auctions for 6 months or more because HUD is waiting for a new budget to be passed. Then finally, there is an auction and a feeding frenzy of starved contractors bids the prices down.

Everything you do related to this work must follow HUD REAC requirements and protocol. All inspections must be done with HUD REAC UPCS inspection software following HUD's UPCS protocol. During an inspection you must record each item into the software and call it out to the property representative as you observe it. You will be required to call HUD sometimes during an inspection, and you will have to wait on hold, but only for 20 minutes, then you will be automatically disconnected. So, you will have to call back again and maybe a third time.

To be certified you have to complete the 5 day Phase 1 classroom training and pass the classroom test. Then you have to complete a 3 day Phase 2 field training with a HUD QA inspector and pass the field test.

After you pass both phases and are certified, HUD tries to send a HUD QA inspector at least once every quarter to observe one of your inspections. They may show up and suprise you at your scheduled inspection or they may go reinspect several weeks later. If they find deficiencies on the property that you did not record in your inspection, they may consider you Outside of Standards or "OS" and issue a Performance Deficiency. You can also get a Performance Deficiency if you have an inspection rejected by HUD or for not complying with their Code of Conduct or not following their protocol. If you accumulate three Performance Deficiencies you are decertified. If you complete 30 successful inspections without a Performance Deficiency, the most recent deficiency can be removed.

You can also be decertified for not completing any successful inspection for a period of 90 days or 180 days if you pass the computer based training before 120 days has past since your last successful inspection. This requirement can be waived by HUD during the long periods when they don't issue any work through the RAP.

You can make a little money in this business, but not much and you can't rely on it. There are long periods between auctions. Some parts of the country have more HUD work than others. It depends a lot on your location. If you travel to do this work you have to cover travel costs and still be competitive with HUD certified inspectors that live close to that area.

My guess is the Jacksonville area has enough HUD work for 1 inspector to get less than half-time work (maybe an average of 8 inspection days per month). There may actually be a lot less work than that. I know Jacksonville just got a new inspector this year and there was already at least 1 living there and a couple in Orlando and several others in Florida. So, it looks like you could be the third REAC inspector in J'ville. You might want to contact one of those local REAC inspectors and ask how many days of REAC work there are per year in your area. HUD posts the names of the REAC inspectors who choose to allow their information to be posted on the HUD website. Just go to HUD.gov and use the search box. The search box is a good way to find anything in the HUD website.

[Michael Gantt]

$300 per day on REAC inspections is probably now a very "optimistic" estimate. The reverse auction program has driven the rates down, and many inspectors are getting fed up with it.

[Universal Property]

$300 per day on REAC inspections is probably now a very "optimistic" estimate. The reverse auction program has driven the rates down, and many inspectors are getting fed up with it.


My sentiments EXACTLY!

[Warren Porter]

Yes, draw inspection can be a good source of additional income. You just have to be smart when you do them. I have seen a dramatic decrease in draw inspections over the past 6 months. The ones I'm doing now are for mostly high end custom homes. When builders are not building the draw inspections decrease. Most residental draws pay around $50 to $75 sometimes higher depending on the property. Remember that the cost of the draw is passed onto the borrower.

There is a company I know of that you can consider for this. Its called Granite Construction Inspections. Thy pay the above fore mentioned rates per draw inspection, I negotiated the upper rate. So far a nice company to work with as I have just started. They want lots of pictures and have a checklist of relevant progress of the job to report. The website is Granite Construction Inspections (http://www.GCInspects.com).

[Galen L. Beasley]

I was one of the first inspectors ceritifed to do REAC inspections in the late 1990"s. It paid $240 per inspection whether it was a 3 bedroom group home or a large multi building apatrtment complex scatterd over several acres. I quit doing them when they started the reverse auction bids and so did most of the original inspectors I knew. I have heard that some inspections are being bid on for as little a $40-$50. When you throw in the frustations from govenment bueracy you have to deal with, what little profit you may make does not seem worth it to me.

[Kelly Lloyd]

I was one of the first inspectors ceritifed to do REAC inspections in the late 1990"s. It paid $240 per inspection whether it was a 3 bedroom group home or a large multi building apatrtment complex scatterd over several acres. I quit doing them when they started the reverse auction bids and so did most of the original inspectors I knew. I have heard that some inspections are being bid on for as little a $40-$50. When you throw in the frustations from govenment bueracy you have to deal with, what little profit you may make does not seem worth it to me.

Couldn't agree more, too many frustrations for me. Scott said it best, build up your own business and forget about REAC inspections.

[John Gomez-Iglesias]

Thank you gentleman, for the information posted here, and for saving me a head-ache. I live down in Miami, Florida, and although there probably is a considerable amount of work down here, your input concerning the amount of work required, dealing with the bureaucracy and the reverse loan issue affecting the compensation for these types of inspections has changed my opinion of them.

It's just like down here in Florida, brokers now want to pay us appraisers $35-40 bucks for a "desktop appraisal" (which is a glorified pencil search) instead of ordering an actual appraisal and spending what is actually worth our skill, training & time.

Again, thank you gentlemen. I think I'll just stick to being a field inspector on the side for a bit of extra cash.

Good hunting!

[Dede Coleman]

I am a Contractor performing Initial Inspections and preservations. I recently did a multi unit (4) and expected to be paid per each unit, not parcel.

Does anyone know of any guidelines that HUD pays from? I have found one on the HUD site, but of course it does not list Initial Inspections and Initial Cleanings? I know in regards to a Loan, it's one Parcel, unless it's a Condo or something that can be sold seperately.

Thank you