Northern Michigan Mortgage Lender | Kirby and Angie | Arch Mortgage - North

Buy a HUD Home That Needs Repairs—Without Paying Out of Pocket

HUD 100 with Repair Escrow allows you to buy a HUD-owned home that needs minor repairs and finance those repairs—up to $10,000—right into your FHA mortgage. No upfront contractor costs. No extra loans. Just a smart way to turn a fixer-upper into a place you can call home.

🛠️ Step-by-Step: From Offer to Repairs

  1. Make Your Offer
    Let your real estate agent and lender know the home needs work. Your offer will include a note that you plan to use repair escrow to fund post-closing repairs.
  2. FHA Appraisal
    An FHA appraiser will inspect the home. If there are any required repairs for safety, health, or livability, they’ll be listed in the report.
  3. Get Contractor Estimates
    You’ll get bids from licensed contractors for the required work. A 10% contingency is added to the total. For example, $6,000 in repairs means $6,600 will be set aside in escrow.
  4. Close on Your Loan
    You don’t need to pay for the repairs out of pocket. The full repair amount is added to your loan and held in escrow by the title company at closing.
  5. Complete the Repairs
    After closing, you’ll have up to 90 days to get the work done. Your contractor must follow the original bid exactly.
  6. Final Inspection
    A final inspection will confirm the repairs are complete and meet FHA standards.
  7. Release of Funds
    Once the repairs are approved, the title company releases the funds to pay the contractor. Any leftover escrow funds are applied to your loan principal.

🔍 What You Need to Know

  • Repair escrow covers minor, non-structural work only
  • Examples: roof patching, broken furnace, plumbing, electrical, windows, siding, paint
  • Major renovations or structural issues require a different loan program (like FHA 203k)
  • All repairs must be completed within 90 days of closing

📍 We Lend Statewide — But We’re Local, Too

We proudly serve clients throughout all of Michigan, with deep roots and expert knowledge in Northern Michigan markets like:

  • Traverse City
  • Cadillac
  • Lake City
  • Manton
  • Houghton Lake
  • Higgins Lake
  • Roscommon
  • Grayling
  • Gaylord
  • Charlevoix
  • Petoskey
  • Manistee
  • Frankfort

Whether you're buying in the Upper Peninsula, Metro Detroit, Grand Rapids, or the shores of Lake Michigan, we’ve got you covered with expert FHA lending options across the state.

📞 Connect with Kirby or Angie Today

Kirby: (231) 709-3136
Angie: (616) 581-6123
www.NorthernMich