12.15.1 Application for Disbursement of Escrowed Funds

A. Form HUD-92464M, Request for Approval of Advance of Escrow Funds, must be used where the escrow is to ensure completion of offsite improvements, demolitions, additive change orders, Non-Critical repairs and accessibility-related Critical repairs approved for deferred completion (within 12 months of initial closing) under Section 223(f) program, temporary resident relocation, or Borrower’s unpaid construction items at final endorsement.

1. The Borrower must initiate the process by completing form HUD-92464M. The Borrower must determine the amount of funds to request for release from the escrow that align with the completed work. The Lender must complete the form before submitting a disbursement request to HUD for approval.

2. The HUD Inspector is required to record the percentage of acceptably completed escrow work on the HUD Representative’s Trip Report, form HUD-95379, and should also sign page 5 of form HUD92464M in the space for the HUD Inspector if requested work is acceptably completed. The Borrower will review the Trip Report to determine the amount of funds to request for release of escrow funds that align with the completed work. After the Borrower has reviewed the Trip Report and entered information on the form HUD-92464M, the Borrower must forward a copy of both forms to the Lender for their review and completion before the disbursement request is submitted to HUD.

3. HUD will not authorize interim advances (form HUD-92403) that exceed the documented percentage of completion less the applicable retainage. An interim advance is the difference between the percentage of completion times value of work currently complete previous payments that included a 10% retainage, until work is 50% complete. (This does not apply to the Section 223(f) program.)

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Chapter 12 Construction Period 12.15 Escrowed Funds, Letters of Credit, Deposits, Holdbacks and Related Matters

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4. Where excess mortgage proceeds are used to fund an escrow for completion of offsite improvements, additive change orders or mortgagor’s unpaid construction items, return the original copy of form HUD-92464M to the depositor and retain one copy.