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Smith Realty, Inc.
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Smith Realty, Inc
Buy or Sell Your Orlando to Tampa Bay Home
  • Blog
  • Meet the team
  • About
  • Properties
  • HUD Homes
  • New Construction
  • Areas We Service
    • Clearwater
    • St. Petersburg
    • Largo
    • Tampa
    • Haines City
    • St. Cloud
    • Winter Park
    • Orlando
    • Winter Springs
    • Davenport
    • Dundee
    • Oviedo
  • How Much Is My Home Worth
  • Testimonials
Smith Realty, Inc
Buy or Sell Your Orlando to Tampa Bay Home
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What Does HUD's IE Designation Mean?

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Smith Realty, Inc. ,12/21/2020

FHA Repair Escrows-Contracts with “ie” Financing

HUD contracts that have “203 (b) repair escrow” selected in Section 4 of the HUD sales contract are offered FHA insurable if the home is repaired to meet FHA minimum property requirements (MPR) within 30 days after closing (never before). These homes come with a Property Condition Report/Summary that outlines current MPR requirements. The buyer is responsible for paying for a new FHA appraisal that must affirm or refute the existing repair escrow items. It is important to note that the new FHA appraisal may reflect additional MPR items. The buyer must obtain estimates from a licensed contractor to remediate all MPR items. The repair escrow cannot exceed $10,000 (plus the 10% reserve). If it does, the buyer will have to cancel their contract or convert their FHA loan to a Streamline or 203K loan. The repair escrow is not a seller credit or gift and cannot be collected in cash from the buyer at closing. Rather, 110% of the repair escrow must be added to the buyer’s mortgage. No one can waive or decline the repair escrow. After closing, the buyer has 30 days to complete all repairs and schedule a follow-up home inspection with the FHA appraiser or a FHA compliance inspector. If the repaired home meets FHA’s MPR, the lender should authorize the HUD Buyer Select Closing Agent to release the escrow funds to the buyer. To modify the repair escrow, see below:

  • In FLORIDA, Sage Acquisitions: The lender is required to prepare a letter (on letterhead with full contact information) explaining that the repair escrow modification is a condition of the loan as supported by the new FHA appraisal. The letter is to be given to the buyer’s agent. The buyer’s agent must go to http://sageacq.com/atlanta-hoc-region/ , download and complete the appropriate addendum, and email it to atlanta.amendment@SageACQ.com accompanied with the lender’s letter.

 


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Smith Realty, Inc.
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FL 32826 Office Branch Address: 12360 66th St N, Suite X1, Largo, FL 33773
321-285-9337
jesse@smithrealtyinc.com

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