Escrow hold back for repairs for a purchase mortgage

DDA Mortgage • January 17, 2022

Conventional and FHA loan with Repair Escrow


Many buyers, sellers, and investors don't know about escrow holdback options or when to use them.



First, what is an escrow holdback?


An escrow holdback is an agreement that the lender will holdback money in an escrow until the seller takes care of some type of contingency. Common reasons for a holdback are repairs to the home or property.



What are some examples of an escrow holdback?


Buyer's may ask a seller to hold back escrow until they repair fences, landscaping, driveways, sprinklers, and/or anything that could affect the evaluation of the home and property.


For example, the home has a broken fence. But the seller could only schedule the repairs until after the closing date. You can keep your closing date and the lender can escrow funds to be released as soon as the repairs are complete.


What cannot be held back in escrow?


You cannot hold back escrow for just any home repair. If there are health or safety concerns, they must be addressed before closing on the home.



Who Decides When There Is An Escrow Holdback?


Holdbacks typically start with the appraisal, your lender based on the appraisal will decide when an escrow holdback is necessary. If your lender plans to sell your mortgage to a Freddie Mac or Fannie Mae after closing, they must comply with that governing rules regarding property appraisals and repairs. This can also lead to a holdback.


How Much Can A Lender Holdback?


Lenders can holdback up to 10% of the value of the home for conventional loans. There is a 90 day window and there will be a reinspection fee. FHA loan escrow holdbacks are about $5,000, have a 90 day window, and may have a reinspection fee.


Before you start looking for financing, make sure you have an experienced mortgage broker that can handle any issues that may arise during the process. You don't want to lose your dream home because your financing fell through.


DDA Mortgage has over 250 5-star reviews and 36-years of experience. Contact us today and start your mortgage application.

Start Your Loan with DDA today
Your local Mortgage Broker

Mortgage Broker Largo
See our Reviews

Looking for more details? Listen to our extended podcast! 

Check out our other helpful videos to learn more about credit and residential mortgages.

Asset based lending with no min fico score

By Didier Malagies • January 26, 2026
• 12-Month Bridge Loans with interest-only payments • Cash-Out Refis, Purchase Loans, Second Liens, and Portfolio Loans • Nationwide lending on non-owner occupied residential properties, including condos • No FICO minimum – We welcome credit-challenged borrowers • No income or employment verification • No seasoning required • No appraisal contingencies • We fund mid-foreclosure and past bankruptcy deals • Pure asset-based lending – • Closings in as fast as 3–5 days tune in and learn https://www.ddamortgage.com/blog Didier Malagies NMLS #212566 dda mortgage nmls#324329

Cost of retirement comfort soars, leaving most far short

By Didier Malagies • January 14, 2026
Cost of Retirement comfort soars, leaving most far short

Does your condo association needs funds for a new roof

By Didier Malagies • January 12, 2026
1. HOA / Condo Association Loans (Most Common) These are commercial loans made directly to the association, not individual unit owners. Typical uses Roof replacement Structural repairs Painting, paving, elevators, plumbing Insurance-driven or reserve shortfalls Key features No lien on individual units Repaid through monthly assessments Terms: 5–20 years Fixed or adjustable rates Can be structured as: Fully amortizing loan Interest-only period upfront Line of credit for phased projects Underwriting looks at Number of units Owner-occupancy ratio Delinquency rate Budget, reserves, and assessment history No personal guarantees from owners 2. Special Assessment Financing (Owner-Friendly Option) Instead of asking owners to write large checks upfront: The association levies a special assessment Owners can finance their portion monthly Reduces resistance and default risk Keeps unit owners on predictable payments This is especially helpful in senior-heavy or fixed-income communities. 3. Reserve Replenishment Loans If reserves were drained for an emergency repair: Association borrows to rebuild reserves Keeps the condo compliant with lender and insurance requirements Helps protect unit values and marketability 4. Florida-Specific Reality (Important) Given your frequent focus on Florida condos, this resonates strongly right now: New structural integrity & reserve requirements Insurance-driven roof timelines Older associations facing multi-million-dollar projects Financing often prevents forced unit sales or assessment shock Many boards don’t realize financing is even an option until it’s explained clearly. 5. How to Position the Conversation (What to Say) You can frame it simply: “Rather than a large one-time special assessment, the association can finance the project and spread the cost over time—keeping dues manageable and protecting property values.” That line alone opens the door. 6. What Lenders Will Usually Ask For Current budget and balance sheet Reserve study (if available) Insurance certificates Delinquency report Project scope and contractor estimate Bottom Line Condo associations do not have to self-fund roofs or major repairs anymore. Financing: Preserves cash Reduces owner pushback Helps boards stay compliant Protects resale values Tune in and learn https://www.ddamortgage.com/blog didier malagies nmls#212566 dda mortgage nmls#324329
Show More