How many draw requests may the mortgagee approve for a 203(k)?

For a Standard 203(k) Rehabilitation Mortgage Insurance Program, the mortgagee may approve a maximum of five draw requests (four intermediate and one final). 

For a Limited 203(k), the mortgagee may approve a maximum of two draw requests per contractor or the borrower (if acting as the contractor, under a Self-Help Agreement).  When necessary, the mortgagee may arrange a payment schedule, not to exceed two releases, per specialized contractor (an initial release plus a final release). 

For additional information see Handbook 4000.1 II.A.8.a.xviii.(C)(1)(d) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

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-04919