Our internal mortgage bank and at least one of our wholesale sources now allow “Escrow Holdbacks” for both FHA and Conforming/Conventional loans.
Escrow Holdbacks are an excellent convenience when underwriters call out repairs that normally need to be done prior to close of escrow. Our lending sources will allow us to close the loan before the repairs are done and then do the repairs after close as long as 1.5 times the estimated cost of repairs is held in escrow as an “Escrow Holdback.”
Contractors must make the necessary repairs and the holdback money must be disbursed within 90 days of the close of escrow (in most cases). Money will be disbursed from escrow to the contractors once the work is “certified” as completed by a 3rd party. Any excess funds (over and above the repair costs) will be applied to principal (to pay down the loan).
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646