What is the Repair with Escrow Program?
The repair escrow program is offered when a HUD property requires less than $5000 in repairs to meet the intent of minimum property standards. A 10% coverage is also calculated into the costs so the actual amount given on any repair escrow can be as high as $5500. Minimum property standards are defined as items that affect the habitability of the home. Examples would be roofing, plumbing, electrical, mechanical, bare flooring, etc. At closing, the buyer must finance the HUD-designated repairs into their mortgage. The buyer has 90 days from closing to hire a contractor and complete the repairs. Upon completion and an inspection by the lender, the lender will pay the invoices. The lender is paid a fee by HUD at closing to manage the process. If there are funds remaining after all invoices are paid, they will be applied to the principle balance of the buyer’s loan. If the funds are not adequate to repair the property, the additional cost is the buyer’s responsibility. If the buyers do not
