Frequently Asked Questions


Yes and No. Some programs may allow you to act as an owner-builder if you are a full-time licensed general contractor. Others may allow you to manage, hire subcontractors and control how, when and to whom the funds are being made if you were to hire a project manager to supervise your project.

When hiring a contractor to build a home or renovate your new fixer-upper, it’s important to obtain several quotes and investigate each contractor’s work before making a final decision:

~ Check with the Better Business Bureau to see if the contractor has accumulated complaints. 

~ Make sure the company has sufficient General Liability or  Workers Compensation Coverage.

~ Check for quality workmanship in the contractor’s current and past work.
~ Be wary of unexpectedly low bids, which might not cover costs that are certain to develop later. 

~. Make sure the company has a permanent address and a good reputation with lenders, subcontractors and vendors.

~ Make sure you receive a clearly written contract and description of material for the work. 

~ Builder Application; this form ensures that the building professional is experienced and current and past track record is in good standing.

~ Description of Project Materials; this information describes the materials to be used in the construction of the home, for example, wood shingle roof or lightweight tile, redwood siding, or cedar shingle.

~ Cost Breakdown; this is generally prepared by both the builder and the borrower, which includes the hard costs (lumber, bricks, mortar) and all the soft costs (permits fees, engineering fees, and the land loan balance.)

~ Final Architectural Plans; These consist of a legible set of architectural drawings (building plans) prepared by an architect and approved through city and county planning. They typically include a floor plan showing all dimensions, outside elevations of the building, electrical and plumbing details, and HVAC.

~ Contractor Agreement; a contract between the builder, the borrower, and basic lender previsions that describe the scope of work, project timeline, project cost, and contractor compensation.

~ General Liability Insurance; This insurance protects the General Contractor from lawsuits by sub-contractors due to injury. It also protects you by providing for damage coverage due to negligence. Because most projects include sub-contractors, ensuring that your General Contractor has sufficient liability insurance to shield you from possible claims from these independent contractors is important to protect your investment.