How does a lender close-out a 203(k) Mortgage in FHAC?

Once the 203(k) Rehabilitation Mortgage Insurance Program rehabilitation escrow account is closed, the mortgagee must complete the Escrow Closeout screen in FHA Connection (FHAC) within 30 days.

The mortgagee must certify that the following documents were reviewed and verified for accuracy:
• Final Release Notice
• Borrower’s Letter of Completion
• Title update/Lien waivers
• Draw request forms and inspection reports
• Change orders
• Mortgagee accounting of the rehabilitation escrow account and payment ledgers
• Contingency release letters

An authorized user of the originator, sponsor, holder, or servicer of the loan can use Escrow Closeout.

The Escrow Closeout screen may be accessed through the following sequence of FHA Connection links: Single Family FHA, Single Family Origination, Case Processing, and Escrow Closeout.

The FHA Connection Guide is available at

For additional information see Handbook 4000.1 II.A.8.a.xviii(C)(5) at

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-02090