HomePath borrowers may request up to three draws from their repair fund, if all three draws are utilized the third draw must be the final draw. Draw Administrators may NOT approve draw requests unless there is a valid date in the ‘Funded’ date in PCL (a valid date shows the present date or any preceding day—future dates are not valid) and the Draw Administrator has access to a copy of the Final Signed HUD-1 Settlement Statement and the HomePath MMW. If the Final Signed HUD-1 is not available yet the Disbursement Coordinator will contact accounting and ask for a copy of the loan’s ledger to verify that the funds have been received. In conjunction with the first draw all permits must be
36 submitted to the draw department. If no permits are required the form ‘Statement Regarding Permits’ must be completed and submitted with the draw request paperwork.
NO funds are released until a portion of the work is completed – there are no exceptions to this. There is no percentage limit on what may be requested for a specific draw request as only completed work is being reimbursed. A ten percent holdback will be retained from each draw and placed into a holdback fund. The holdback fund is released in conjunction with the final draw. A draw inspection must also be conducted in conjunction with each interim draw request.
Interim draw disbursements are processed as follows:
o A HomePath interim disbursement request is received by the Draw Administrator
o Once the form is verified by the Draw Administrator as being complete and correct the request is approved. A complete and correct HomePath interim disbursement request contains, at a minimum, all of the following information completed:
o Date
o Borrower’s Name
o Movement Mortgage Loan Number
o Property Address (including City, State and Zip Code) o Contractor Name
o Payment Amount
o Repair Categories Being Requested
o Description of the Completed Items in Each Category Being Requested o Percentage of Each Category Being Requested
o Borrower’s Signature & Date
o Co-Borrower’s Signature & Date (when applicable) o Contractor’s Signature & Date
o Should an Interim Disbursement Request form be missing items or be incorrect, the borrower must complete or correct the missing/incomplete items or grant the Draw Administrator permission to fill in/alter certain items. Signatures must always be completed by the Borrower, Co-Borrower and Contractor respectively (with the
exception of a legitimate need for a document to be signed by POA) and no digital/web signed documents are allowed.
o HomePath files which have engaged a Consultant will utilize the same paperwork as that utilized by the FHA 203(k) Full Interim Draws. Please see the ‘FHA 203(k) Full Escrow Disbursement Process, Full Interim Draw Disbursements’ section of this document for a list of the required items that must be completed on this document prior to approval. The Consultant will also conduct the required draw inspection for the HomePath Interim Draw Request.
o HomePath files which do not have a Consultant will engage an appraiser to re-visit the property and conduct a status inspection. When the Draw Administrator is notified that a HomePath property is ready for an interim inspection they contact an appraiser and order the status inspection. Upon receipt of the status inspection they complete the HomePath Interim Draw
37 Form based on the appraiser’s notes, pictures and other pertinent information contained within the inspection form.
o At this time, if the property is located in a state with full title update requirements, the Draw Administrator orders a title update. For an interim draw the title update is not an item that will hold up the disbursement. If any liens or negative judgments are found no additional draws will be approved until the lien is removed and a title update is received which shows that the item has been removed. States that require a title update with every draw are as follows:
Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Rhode Island, Virginia and West Virginia. If an update is ordered the Draw Administrator follows up with the title company or attorney’s office in a timely manner until the update is received. If a fee is due they follow the process noted under the FHA 203(k) Streamline Final Draw, Title Update. o After the request is approved the Draw Administrator confirms with the borrower what address
the borrower would like to receive the check at. Only the borrower may request to have the check sent anywhere besides the property address or their current mailing address.
o When an address has been confirmed the Draw Administrator enters the check onto the accounting Escrow Disbursements Check Request Google Docs Spreadsheet
o Once the Draw Administrator enters the check request, the Escrow Disbursement Check Request Process is followed. See directions below under Escrow Disbursement Check Request Process.