Home Buying in 08901>Question Details

Pharoah Jeff…,  in New Brunswick, NJ

When purchasing a property using FHA 203K when does the bank disperse the funds to cover the repair costs?

Asked by Pharoah Jefferson, New Brunswick, NJ Mon Jun 10, 2013

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Gerald Santoro’s answer
Good answer Michael!
An important point to mention is that there are 2 different 203K loan options available, a Streamline 203K with a maximum of 35,000 towards repairs and a full 203K for anything above that amount. The Streamline has the 60 day period to complete the repairs as previously mentioned by Michael. A Full 203K has up to 6 months.
At loan closing, the mortgage proceeds will be disbursed to pay off the seller of the existing property and the Rehabilitation Escrow Account will be established. Construction may begin. The homeowner has up to six (6) months to complete the work depending on the extent of work to be completed.
0 votes Thank Flag Link Mon Jun 10, 2013
Thanks Gerald, I sent you a message after removing my comments.
Flag Mon Jun 10, 2013
For streamline, funds are dispersed in 2 payments after closing. For full 203k, funds are dispersed 2-5 times and all work permits must be in place before the first payment. For more details about 203k loan, visit http://www.cfs203k.com.
0 votes Thank Flag Link Fri Oct 11, 2013
This happens AFTER closing. This is true regardless of it being a streamline or a full 203(k). Depending on who the lender is, it can typically take about a week or so after closing.

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Javier Meneses
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0 votes Thank Flag Link Mon Jun 10, 2013
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