Never Do Extra Work During Your 203k Without a Change Order

Never do extra work during your 203k without a change order.

This is one of the most important rules in the entire 203k process. And one that gets many buyers into trouble.

Once your renovation scope of work is approved and the loan is closed, everything must follow that approved plan. If you decide to do extra work, add upgrades, or fix something that was not in the original write-up, you must go through a formal change order process first.

Why is this so critical?

The lender and HUD consultant only release money for work that has been pre-approved in the scope. If you let the contractor do extra work without a change order, that work is not eligible for payment from the escrow funds. You could end up paying for it out of your own pocket. Even worse, it can delay draws, cause compliance issues, and create problems at the final inspection.

Doing unapproved work also puts you at risk of the contractor expecting payment that the lender will not provide.

Here is the correct way to handle any changes:

If you or the contractor discover something that needs to be added or changed, stop and create a formal change order. The change order must clearly describe the new work and the exact cost. Submit it to your HUD consultant for review. Once approved by the consultant and your lender, it gets added to the official scope. Only then can the contractor proceed and get paid for that work through the normal draw process.

Pro tip. Never verbally tell your contractor to “just go ahead and do it.” Put every single change in writing and get it approved before any extra work begins. This protects your budget and keeps the entire project compliant.

Sticking strictly to the approved scope until a change order is officially accepted is one of the best ways to keep your 203k project on time, on budget, and stress-free.

It might feel slower in the moment, but it saves you from expensive surprises and arguments later. Always use the change order process. It exists to protect you.