3.7.12 For Cash Out/Equity Out Proceeds When Repairs are Deferred

A. Fifty percent (50%) of any cash out proceeds after funding mortgageable transaction costs and the assurance of completion requirements must be held in an escrow by the Lender until the deferred repairs are completed and HUD approves the release of funds remaining in the Repair Escrow. (See Chapter 8, Section 8.11.1.A.2.c for exceptions and Chapter 12, Section 12.17.1.3 for detailed escrow release instructions.)