Fillable Rehabilitation Loan Agreement Template (Page 2 of 4) in pdf

matching partial lien waiver. The draw will holdback 10% of the Consultant fee listed on their SOR

with each draw.

6) The “LENDER” shall, subject to the foregoing, release the Escrowed Funds by check, payable to

the Contractor, or other appropriate payee who performed the Work, as defined in the

Homeowner/Contractor Agreement, and supplied the materials in connection with this

Agreement. Additionally, the final release of the escrow funds is to take place only after, inter

alia, the local jurisdiction has provided its final acceptance of the Work and issued a Certificate of

Occupancy, or equivalent, if applicable.

If a Mortgage Payment Reserve is established in the Escrow Funds account, the Lender may draw

from the account to make the monthly mortgage payments provided the dwelling has not been

occupied and/or the Final Release Notice has not been issued.

The “LENDER” may determine that additional compliance inspections are required throughout the

rehabilitation process to ensure that the Work is progressing in a satisfactory manner. Release of

funds is not authorized on this type of inspection; however, Borrower is responsible for paying the

inspection fee. The “LENDER” may require an inspection if there have been no draw requests for

more than 30 days.

7) a. The cost of repair as indicated on the appraisal report and Homeowner/Contractor Agreement

is $________________________.

b. The reserve contingency required by The “LENDER” is $_______________________________________.

c. The total Escrowed Funds for renovation of the Property is $ __________________________.

8) The interest accumulated in the Escrow Funds account will be distributed as required by the 203(k)

Borrower’s Acknowledgment, form HUD 92700-A.

9) If the contingency reserve (as per 7b.) or any part thereof is not used, the remaining balance shall

be applied as a partial prepayment of the principal balance of the Note. Such prepayment will

not extend or postpone the due date of any monthly installment due under the Note, nor change

the amount of such installments.

10) If a dispute arises between the Borrower and the approved General Contractor, the Borrower has

the right to hire a new General Contractor. That Contractor must first be approved by the

“LENDER” prior to any work starting. The Borrower CANNOT act as a General Contractor. If a new

General Contractor is not approved by the “LENDER” and the work is not done within one

hundred eighty (180) days from the note date, the “LENDER” may, in its sole discretion, make a

principal reduction payment with the Escrow Funds. If the Escrow Funds are used to make such a

principal reduction, the final payment to the Contractor will not be available from the “LENDER”

and shall be the sole responsibility of Borrower.

11) The Borrower will insure that all improvements on the Property are completed pursuant to a, and

in accordance with, a Homeowner/ Contractor Agreement as accepted by the “LENDER”,

including but not limited to, in accordance with the time constraints set forth in the Homeowner/

Contractor Agreement.

Rehabilitation Loan Agreement / FHA STANDARD 203(k) /Rev. 11/24/2015

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Rehabilitation Loan Agreement Template Page 2