Compare Mortgage Quotes

Refinance Rates for Today

Please enable JavaScript for the best experience.

In the mean time, check out our refinance rates!

Company Loan Type APR Est. Pmt.

what is an escrow holdback

Buyer wants to buy a home with FHA loan. Home has work to be done that probably will not be allowed by FHA. Can he do an escrow holdback? And if so who provides the money to be held for work to be done?

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi ferrarab,

As far as I know, an "escrow holdback" is an technique used in merger and acquisition transactions where a portion of the merger is placed into an escrow account. The buyer then can look to the escrow holdback for coverage of its indemnification claims. However, I doubt whether your friend will be allowed to go for an escrow holdback in case of a home purchase.

Thanks

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 03:30 | Post subject:

willamsiddle's picture
willamsiddle | Joined: October 26, 2010 09:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi ferrarab

According to me, the portion of the loan that is held back until some additional requirements such as completion of or an improvement project is attained. The Escrow hold backs are a borrower accommodation that may allow the loan to close and the borrower to occupy the property while incidental work is in progress.

[size=9:7c8f21e2ec][color=Red:7c8f21e2ec][External link deleted as per forum rules. Thanks.][/color:7c8f21e2ec][/size:7c8f21e2ec]

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 03:30 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

I am in the same boat. I am in contract for a place which has 3k worth of section-1 repairs. I am going for FHA. Lander asks for section1 repairs before closing the loan. And Sellers are not allowing that. Is it possible that lander does "escrow holdback" and close the deal first? Then escrow can be used to fix section1?

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 03:30 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome hari,

It will be the lender's discretion whether or not the lender will go for an escrow hold back and close the deal. You should contact your lender and take his opinion in this regard.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 03:30 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

thanks Adonis for responding. Appreciate it.

So, we are buying "as is" and we did not order any inspection. Appraiser has some things in his report which he is asking to be repaired. So, even if its a small set of minor section 1 repairs, can a lander be adamant and refuse to fund before fixing it? Asking before the seller is not at all ready to let us (buyers) do any repair before deal closes.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 03:30 | Post subject:

Page loaded in 0.106 seconds.