Can Unused Repair Set-Aside Funds for a Fixed Rate HECM be made available to the borrower?

No, for all fixed rate Home Equity Conversion Mortgage (HECM) case numbers assigned on or after June 25, 2014, unused repair set-aside funds shall not be made available to the borrower.

For more information see:
Mortgagee Letter 14-11 at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee
Federal Register 24 CFR 206.26 at:  

https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=1&SID=c431228bd419ebcafbfda37ecb92005b&ty=HTML&h=L&mc=true&r=PART&n=pt24.2.206 


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-04918