When repairs are required for structural or mechanical deficiencies that exceed the Seller's contractual obligation, GMG can assist borrowers. GMG allows the ability to finance required improvements based on an "as improved" appraised value, in combination with an escrow hold-back at closing.
Unless the deficiency is a significant item that negatively impacts the safety or livability of the dwelling, loan closing need not be delayed. For those deficiencies that can be corrected post-closing, GMG will require, in addition to our standard closing items:
| • | A corrected FNMA 1003 (Uniform Residential Loan Application) with the amount of financed improvements listed under the "Repairs" Section.
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| • | Estimates/contracts for all repairs financed with loan proceeds. |
| • | A GMG-approved escrow hold-back agreement signed by buyer and seller at closing.
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| o | A collection of one and one-half times of the estimated repair cost retained at closing to be disbursed by the settlement agent.
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| o | Final inspection of required repairs will be required.
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| • | Rural Development requires all repairs to be completed prior to their issuance of the final Loan Note Guarantee (Rural Development Form 1980-17). However, external repairs delayed by weather related issues must be completed within 120 days of loan closing as outlined in Rural Development Instruction §1980.315 - Escrow accounts for exterior development. |
| • | It is our policy to have repairs for internal deficiencies completed within 30 days of loan closing. As Rural Development will require a final inspection once the work is completed, please include this expense as part of the escrow holdback. |
