First, let’s cover what an escrow is. In mortgage terms, an escrow is an account set up and managed by the lender to pay for the expenses to your property. Why set up an escrow? It means funds will be available and payments will be made to ensure the loan remains in good standing.
For renovation purposes, there are multiple repair escrow options, including:
HUD REO with Repair Escrow
This loan type is designed for buying and renovating foreclosed properties. That means the home is often more affordable, giving you an opportunity to put more money into the home through a renovation. You can add up to 110% percent of repair costs to the balance. The repairs should be completed within 90 days of sale.
USDA Repair Escrow
A USDA Escrow home loan helps a USDA buyer make the required repairs before purchasing or refinancing a USDA property. This program helps you save money by rolling the cost of the purchase/refinance and the repairs into one loan.
Buyer/Seller Funded Repair Escrow
This renovation loan allows funds to be provided by either the buyer or the seller of the home. It’s perfect for making borrower-requested repairs or other home updates.All costs are rolled into a single loan.
If any of these loans meet your needs, contact a local PrimeLending loan officer for more information.