What is Escrow Holdback?

Monday, 01 August 2011 18:45

• If a buyer is looking for a USDA or FHA loan but the property needs up to $5000(FHA) or $10,000(USDA) of improvements required by the appraiser to meet HUD standards, we can finance those improvements in the loan with an ESCROW HOLDBACK. For example: If a buyer is looking to purchase a home that is in good condition but needs a new HVAC unit for $4000 b/c it was stolen, he/she can purchase the home with a USDA loan financing 100% of the price, closing costs, prepaid items, and the $4000 for the hvac. The seller and all costs are all paid at closing and the contractor is paid after completion of the work from escrow. Great solution to today’s foreclosure and vacant property problems.