Must the Mortgagee evaluate the 203(k) Consultant’s performance?

Mortgagees must exercise due diligence with regard to the full scope of the 203(k) Consultant’s services. Standards for the 203(k) Consultant’s performance must be clearly defined in the mortgagee’s Quality Control Plan and should be provided to each Consultant that the mortgagee relies on in the 203(k) program. Mortgagees must evaluate and document the performance of these Consultants on at least an annual basis, to include a review of the Consultant's actual work product.  The mortgagee must not use the services of a Consultant who has demonstrated previous poor performance based on reviews performed by the mortgagee. 

For additional information see Handbook 4000.1 II.A.8.a.xix and at

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-05039