You may not be aware of this but we do allow repair escrows on FHA 203b loans. (203b is the most common FHA loan)
Repair escrows are monies that are set aside (out of seller’s proceeds) to make minor repairs on the home purchased after the closing has occurred.
I wanted to let you know some of the items that are eligible for repair escrows, and some that are not allowed.
These items are eligible for repair escrows:
1) Repair roofs, gutters and downspouts
2) Repair/Replacement/upgrade of existing HVAC systems
3) Repair/Replacement/upgrade of plumbing and electrical systems
4) Repair/Replacement of flooring
5) Painting, both exterior and interior
6) Weatherization, including storm windows and doors, insulation, weather stripping, etc.
7) Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
8) Minor repair to exterior decks, patios, porches
9) Minor basement waterproofing
10) Minor mold remediation
11) Window and door replacements and exterior wall re-siding
12) Other minor repair(s) as indicated by the appraiser as being cosmetic in nature and conform to HUD’s repair escrow requirements
These items are NOT eligible for repair escrows:
1) Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall
2) New construction (including room additions)
3) Any repair that, according to the appraiser’s report, not cosmetic in nature
4) Repair of structural damage
5) Repair(s) requiring detailed drawings or architectural exhibits
6) Landscaping or similar site amenity improvements
7) Any repair or improvement requiring a work schedule longer than 60 days
8) Repair/Rehabilitation activities that require more than one (1) final disbursement
If you are buying a home and you think you may need a repair escrow. Give us a call or shoot us an email and we can discuss whether your scenario would qualify!
Have a good day today! …and thanks for reading.
Brett
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