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FHA 203B With a Repair Escrow

by Lanise
(Birmingham, Al)

I am looking at the FHA 203B with repair escrow home loan. I have a question. In order to qualify for this type of loan, does it have to be a HUD owned home?


Hello Lanise;

Sorry for the delay getting this answered for you. I have been out of town.

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This is a very good question. I commend you for looking at the FHA 203B home loan.

However, you may be confusing this with the FHA 203K home loan.

Just to clear this up, if you are purchasing a home using the FHA 230B home loan, the repairs you are referring to may be for something small like painting or some other minor repairs.

Sometimes, when buying a home using the FHA 203B home loan, the FHA inspector may require a repair escrow for some things that need to be repaired before closing. It could be a few hundred dollars or even a few thousand. Keep in mind the FHA 203B is a loan product that can be used on any home purchase even if it is not owned by HUD.

So to answer your question, no it does not have to be a HUD home to use the FHA 203B loan (with a repair escrow).

Now on the other note, if you are buying say a HUD home (or any other for that matter) and you want to use the FHA 203K home loan, this provides for major repairs rather than just minor ones.

Here is a link to a page on my website that explains this a little further, you may want to check it out. The FHA 203K Home Loan is different than the 203B loan with repair escrow.

I hope this helps you. Also you may want to look at my page for the type of loan you are looking for here at Best FHA Home Loans. This page can help you also.

Best Regards,

Jeff Ragan

Comments for FHA 203B With a Repair Escrow

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FHA 203B
by: Gale

I did not realize there was a difference. This was a very nice explanation between the 203B and 203K loans. Now I know which product to look into depending on how much repair needs to be done to the home. It is also good to know that the home does not have to be a hud home.

Wow what a great question!!!

Not entirely correct
by: Anonymous

"203B with escrow" is actually a program for HUD owned homes with separate guidelines that have similarities but not to be confused with holding escrow on a regular 203B loan.

See mortgagee letter 2000-27

Thank you anonymous contributor, I try my best but do not know everything.


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