203B Escrow Repair

Learn about 203B escrow repair loans at our Loan Information Center
FHA loan program when less than $5000 of repairs are needed.

ELIGIBLE for a Repair Escrow:

  • Repair roofs, gutters and downspouts;
  • Repair/Replacement/upgrade of existing HVAC systems;
  • Repair/Replacement/upgrade of plumbing and electrical systems;
  • Repair/Replacement of flooring;
  • Painting, both exterior and interior;
  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.;
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens;
  • Minor repair to exterior decks, patios, porches;
  • Minor basement waterproofing;
  • Minor mold remediation;
  • Window and door replacements and exterior wall re-siding;
  • Other minor repair(s) as indicated by the appraiser as being cosmetic in nature and conform to HUD’s repair escrow requirements

INELIGIBLE for a Repair Escrow:

  • Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall;
  • New construction (including room additions);
  • Any repair that, according to the appraiser’s report, not cosmetic in nature;
  • Repair of structural damage;
  • Repair(s) requiring detailed drawings or architectural exhibits;
  • Landscaping or similar site amenity improvements;
  • Any repair or improvement requiring a work schedule longer than 60 days; or
  • Repair/Rehabilitation activities that require more than one (1) final disbursement
  • Repair swimming pools;

Repair escrow is not to be used for any repair(s) that would:

  • Require more than 1 payment be made to one contractor;
  • Necessitate a “consultant” to develop a “Specification of Repairs/Work Write-Up”;
  • Require plans or architectural exhibits;
  • Require a plan reviewer;
  • Require more than 60 days to complete;
  • Result in work not starting within 15 days after loan closing; or
  • Cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted