Finding a Contractor for Your FHA Rehab Loan

July 17, 2023

If you want to use an FHA mortgage to buy a fixer-upper to repair and occupy, you’ll need to find a professional contractor to do the work for you. But if you have never hired one before, it’s good to know a few tips about screening the potential contractors you might hire.

Like most major purchases and investments, part of the research phase of the mortgage involves reading reviews of the product/service provided.

If you’ve ever checked out product reviews on Amazon.com, you know that these can be a mixed bag and it is sometimes hard to determine which reviews are legit and which are not.

How to Read Customer Reviews of Your Contractor

Go online and research the reputation of the builder or contractor you want to hire. Note the number of reviews they have gotten, and note how many of them are positive and how many are negative.

With the notion in mind that many are less inclined to take the time to write a positive review, and more are inclined to post negative ones, consider the ratio of good to bad reviews. Also, consider the date of the most negative review. Is it fairly recent?

If not you might feel more comfortable using your FHA loan funds to pay a contractor compared to one who has had negative reviews (especially multiple negatives) in the last year or so.

Custom Builder Reviews to Beware Of

It’s never safe to take the review of a product or service seriously when it uses overly positive language, promo-speak, or positive reviews with no details in them. If you can’t find any specific details about the quality of service, it might be wise to move on to a contractor with positive but more specific reviews.

Consider: “I was happy with the work done and am totally satisfied.” This review tells you NOTHING. It’s not to be taken seriously by a serious borrower. Compare that sort of review with this:

“The builder shared a weekly report with us from foundation to completion...Even on his vacation, he told us about the upcoming work. During supply chain delays, he assured us that his builders are moving forward.”

More Detail = More Honest Review

Note the details in the review that are lacking from the first one. You’ll need to read at least 10-15 such reviews to get a more accurate picture of what the builder’s online reputation is really like.
Reading reviews isn’t the only research you can do. If you know any past clients of your chosen contractor you can always ask about their experience and whether or not they would use the same company again.

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