Bulletin W13-054 – Update, FHA and VA Programs

June 12, 2013Bulletins

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)

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