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  - 203K Guide 101

Apply for a 203k home repair loan

 What Happens after Closing?

Home > Overview > What Happens after Closing?

Sun West will mail the Borrower a Welcome Package after closing.

The HUD Inspector or Consultant will visit the subject property to verify that the improvements are completed correctly and are up to par.

Once executed documents are received, the typical turn time for draws is around 5 business days.

A check is sent out to the subject property if it is habitable, or mailing address if not, and addressed to both the Borrower and the Contractor.

Rehab must start within 30 days of closing and once started, must not stop for more than 30 consecutive days.

Reasonable progress must be made during the rehabilitation period, or the lender may consider the loan to be in default.

The length of rehab cannot last longer than six months. If the project runs over six months, the homeowner must submit an extension request through the form of a letter, providing the explanation of delay and estimated date of completion.

Extension requests are forwarded to HUD for approval.

203k Renovations Periods

No initial draw is allowed on a Standard 203(k) loan. After closing, the consultant will provide a master draw request for up to five draws.

Limited 203(k) loans may have one initial draw up up to 50% of documented materials cost and then one final draw at closing.


A 10% holdback is required on each draw from the Rehabilitation Escrow Account.

The total of all holdbacks may only be released after a final inspection of the rehabilitation with the issuance of the Final Release Notice.

The lender, or its agent, may retain the holdback for a maximum of 35 calendar days, or the time period required by law to file a lien (whichever is longer) to ensure that no mechanic's liens are placed on the property.

Draw Request/203(k) Rehabilitation
Servicing Department
Hours: Monday - Friday 8:30 AM to 5:00 PM PST
(excluding federal holidays)
Toll Free: (800) 453-7884 x 7546

The final inspection will require the Appraiser or HUD Consultant to inspect the property to ensure that all the required renovations were completed. The Appraiser or the HUD Consultant will issue the Final Inspection Certificate.

At this time:
Contractors will sign lien waivers.
All contingency reserves will be paid to reduce the principal.
Final draw(s) will be paid to the contractor(s)


203(k) Rehab Guide Quick Jump

203(k) Rehab Loan FAQs


Sun West Mortgage Company holds over 30 years of lending experience with a reputation of providing excellent customer service.

At Sun West, the complete loan cycle is processed in-house. From origination to underwriting and servicing, Sun West ensures you receive a simpler, faster, more direct borrowing experience with no back and forth intricacies. To see if you are pre-qualified or to obtain more information, call (866) 740 3677.

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