Bulletin W13-054 - Update, FHA and VA Programs

Topic included in Bulletin W13-054:

• Launch of Escrow Holdback Program
• Escrow Holdback Program available immediately for all CMS programs, except, Conventional Jumbo
• Program allows loans on properties where scheduled improvements/repairs are to be completed after the close of escrow
• There are various escrow holdback requirements for different programs, as well as limitations on the types of improvements permitted and the maximum dollar amount to be held
• Highlights include:
  • Minor repairs for all products with the exception of Conventional Jumbo
  • Primary Residences only; Purchase/Refinance, 1-4 Units, Condos and PUDs
  • Maximum holdback amount is $4,999
  • 50% contingency reserve required
  • Appraiser must state the repair is “required”
  • Repairs must be minor in nature, cannot be Health and Safety related, nor can it be related to the soundness of the structure
  • Monies can come from the Seller, Borrower or with Cash-Out Refinance loan
  • Improvement/Repairs must be completed within 15 days
  • Reinspection of the property will take place when work is completed, cost of re-inspection is $150
  • Escrow Holdback Agreement required to be executed by Borrower(s), Seller(s) and the Escrow/Title Company
  • Monies held by Escrow/Tile Company and funds will be released per CMS’s authorization
• The Escrow Holdback program is not to be confused with FHA’s Repair or 203(k) programs
• Underwriting Guidelines have been updated
• The Escrow Holdback Agreement will be posted to the website

Download: Bulletin - W13-054 (PDF)