Can I live in my home during construction on a Standard 203k?

Sound simple enough? How many times have you been asked this question?..and should you answer it? Don't bother looking through the Guidelines, it's not there and for good reason.?

Occupancy?requirements for a Standard 203k, while renovations are underway, would be considered?General Conditions?that are generally part of the contract between Borrower and General Contractor. This is where the contractor, if agreeable, maintains safety and functionality of basic necessities required for habitation and not just for job safety. Also, this does not come without additional costs.?

The real question here is, would FHA allow such costs to be included in a Standard 203k loan? Actually, none of the Participants?have authority in this instance with the exception of the contractor who has?Liability Insurance?at risk.?Conversely, on a Limited 203k, it's presumably concluded that the structure?will be occupied?with the exception of?not more than 15 days therefore habitable by default.?

Furthermore, as a contractor, I would be hesitant to allow occupancy or use of the structure by the owners without approval from my insurance carrier and a?Hold Harmless Agreement?from the owners. This is also a primary concern?when using the Homeowner Contractor Agreement?(HOCA) sample required by lenders because it allows the borrowers to occupy the structure to perform additional work. The HOCA's being used are poorly written and provide little protection for either party.

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