Who is responsible for administering the 203(k) rehabilitation escrow account?

The mortgagee is fully responsible for authorizing draw inspections, managing the rehabilitation escrow account, and approving the associated draws from the account.  It is the mortgageeā€™s responsibility to ensure that any inspections are completed in a quality and timely manner, regardless of who performs the inspections.  The mortgagee may release funds only when repairs and improvements per the draw request meet all federal, state, and local laws, codes and ordinances, including any required permits and inspections. 

For additional information see Handbook 4000.1 II.A.8.a.xviii(C) 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-05003