HomeBridge allows holdback/repair escrow accounts to be established to complete minor repairs to the subject property as long as the safety and habitability of the property are not affected. Holdback/repair escrows are allowed, subject to HomeBridge approval, on all programs with the exception of all USDA programs and the Jumbo program; holdback/repair escrows are ineligible on USDA and Jumbo.
Holdback/repair escrows are subject to all of the following:
• The required repairs cannot impact the habitability or safety of the subject property.
• The maximum amount of repairs is limited to $5,000.
• An estimate, from a licensed contractor, or other qualified professional, listing all repairs is required.
• HomeBridge will hold 1.5 times the amount of the estimate in an escrow account with the exception of HUD REOs and the HUD REO $100 Down program. If the borrower is using their own funds to establish the escrow account, they must have sufficient verified assets in addition to those assets needed for down payment and closing costs.
NOTE: HUD REOs and the HUD REO $100 Down program, HUD only requires an escrow hold of 110% of the estimated repair cost.
• The repairs must be completed within 14 calendar days of loan disbursement. The final inspection must be received within 72 hours of completion.
NOTE: The funds required for the repairs cannot be rolled into the loan amount with the exception of HUD REOs and the HUD REO $100 Down program which do allow the funds for the required repairs to be financed.
Requesting a Holdback/Repair Escrow
If a holdback/repair escrow is requested, the broker is responsible to provide HomeBridge with an estimate which includes all required repairs. Estimates should be provided to your Account Manager. Once HomeBridge Underwriting has reviewed the request, if approved, a condition will be added to the loan approval confirming a holdback/repair escrow is allowed.
HomeBridge will prepare a Holdback/Repair Escrow Agreement for the borrower’s signature. The Agreement confirms the amount of funds to be held by escrow, the scope of work to be completed, and acknowledgement the work to be completed within 14 calendar days of closing.
HomeBridge manages the holdback as the lender; the escrow or closing agent does not have any responsibility for the holdback/repair escrow. The escrow holdback and re-inspection fee are netted from the wire.
Post Funding Requirements
Once repairs are completed, the broker notifies the HomeBridge Account Manager and provides HomeBridge a copy of the contractor’s final invoice. Once the final invoice is received, the Account Manager will order the final inspection to confirm required repairs were completed.
HomeBridge will review the final contractor’s invoice and Notice of Completion and will issue a check to the borrower, generally within 7-10 days after receipt of final inspection verifying completion of work. Requests for status should be directed to your Account Manager. Brokers will be notified via email when the check is mailed to the borrower; a tracking number will be provided to the broker.
The check is made payable to the borrower and the borrower is responsible to pay the contractor in all cases except when the subject property was a HUD REO property; in that instance, the check is made payable jointly to the borrower and the contractor.
Holdback/repair escrows are subject to a pricing adjustment; refer to HomeBridge’s rate sheet for pricing.
If you have any questions, please contact your Account Executive.