203k? What is that?

A 203k is a program that is a great idea but buyer and contractor be warned, it can be a nightmare. Here is how it works.
-You find a house you want
-Get the residence inspected by a qualified inspector (Remember inspectors are not required to get licensed in Michigan, yet) so get references from your Realtor or friends
-Depending on your city, they will also inspect the home and give a report
-The inspectors create a list of major and minor issues
-The Bank will determine what repairs need to be made based on the value of the house
-You MUST hire a licensed and insured contractor to perform the needed repairs
-You CAN NOT do any of the work yourself
Here is the warning part.
For the contractor, once the price is agreed upon by the bank and homeowner, you will get 50% up front for the project. Make sure this amount will cover all materials and you can pay your sub-contractors on time because the second half of the draw will not be released until final inspection from the bank’s inspectors. The problem I ran into was the loan was sold and I couldn’t reach the company that was supposed to do the final inspection. It took almost a year to get my final payment, using my own money to finish. Yeah, my wife was PISSED.
For the customer, if payments are held up or not dispersed, the project could be delayed by months. The worse case scenario could be that the sub-contractors are not payed and they threaten to lien the house before it is finished.
Do your homework and qualify your general contractor.