How do the draws work, and how long will it take before the initial disbursement?
One of the benefits of working Correspondent Lending is that we handle the entire rehabilitation process, including draws and inspections. As a result Correspondent Lending’s preference is to handle the distribution of all rehabilitation funds to the borrower and/or borrower and contractor. The draw process is different for Streamlined 203(k) versus the standard FHA 203(k) programs: Streamlined FHA 203(k): After the loan is purchased by Correspondent Lending and set up in our system (a process which takes approximately 45-60 days), 50% of the rehabilitation funds are then disbursed. Included with the disbursement is the Mortgagor Letter of Completion and instructions that explain how the final disbursement works. For borrowers doing the work themselves, a self-help agreement must be in the file before the funds are disbursed, and the check is made out directly to the borrower. For borrowers working with a contractor, a W-9 must be provided to set up the contractor in our system, and a
