If the total repair costs are less than or equal to $15,000, the mortgagee must ensure that the repairs and/or improvements have been completed by obtaining contractor’s receipts or a signed Borrower’s Letter of Completion. The mortgagee is not required to perform or have others perform inspections of the completed work. The mortgagee may choose to obtain or perform inspections if they believe such actions are necessary for program compliance or risk mitigation. If the mortgagee determines that an inspection by a third party is necessary to ensure proper completion of the proposed repair or improvement item, the mortgagee may charge the borrower for the costs of no more than two inspections per contractor. If the total repair costs exceed $15,000, the mortgagee must ensure that the repairs and/or improvements have been completed by performing an inspection or by obtaining an inspection by a third party to determine that the repairs have been satisfactorily completed. The mortgagee must obtain a signed Borrower’s Letter of Completion.
For additional information see Handbook 4000.1 II.A.8.a.xviii.(C)(1)(d)(ii) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh