Once the Work Write-Up from your HUD Consultant or detailed Bid from your Contractor is completed and reviewed by the Lender, it will be sent to an appraiser who uses it to estimate what the property value will be based on completed improvements. (Note: At times once the appraisal is received Bid additions/updates/tweaks/clarifications may be requested from you or your Contractor to help fully clear the Property Approval stage.)
The renovation specialist submits the Work Write-Up or detailed Bid, Lender Validated Contractor Pkg, and Approved Appraisal for final loan approval. Once this Property Approval process is complete, and any outstanding conditions are met, the loan can proceed to final approval and next closing.
The closing agent will coordinate final figures and all required documents with the lenders closing dept. and make sure they are ready for customers to review and sign, including a copy of the final Closing Disclosure that details all final costs of the transaction. A renovation escrow account will be set up by the lender to hold the funds for payout per the program guidelines. Funds disbursement(s) “draws” are managed by the Lender/Servicer. Depending on the Renovation Program utilized some funds may be released at Closing or just after for the Contractor, or paid via the Draw Payment Process which the contractor should have already been made aware of during the Contractor Selection Phase.