source:
  type: guide
  id: hud-4000-1-iii-l-completion-of-required-repairs
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — l. Completion
    of Required Repairs (04/29/2024)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part III — l. Completion
    of Required Repairs (04/29/2024).
  coverage_tier: operative
obligations:
- id: hud-4000-1-iii-l-completion-of-required-repairs-full
  canonical_id: hud-4000-1-iii-l-completion-of-required-repairs-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part III — l. Completion
    of Required Repairs (04/29/2024)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part III — l. Completion
      of Required Repairs (04/29/2024)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'l. Completion of Required Repairs (04/29/2024) i. Definition
      Completion of Repairs refers to an agreement the Borrower may have entered into
      at closing to complete required repairs after closing. The provisions of this
      agreement are contained in the Repair Rider to the Loan Agreement that the Borrower
      signed at closing. ii. Standard The Mortgagee must adhere to the provisions
      of the Repair Rider and ensure that the repairs are completed and inspected
      before funds for repairs are disbursed. When the required repairs are completed,
      the Mortgagee must: • complete and sign form HUD-92051, Compliance Inspection
      Report; • during the First 12-Month Disbursement Period, change the payment
      plan, if available under the Initial Disbursement Limit, and disburse from an
      existing line of credit. If sufficient funds are not available in the line of
      credit to cover the cost of repairs, recalculate future payments and provide
      an unscheduled payment; • after the First 12-Month Disbursement Period, change
      the payment plan and disburse from an existing line of credit. If sufficient
      funds are not available in the line of credit to cover the cost of repairs,
      recalculate future payments and provide an unscheduled payment; • disburse jointly
      to the Borrower and the contractor(s) funds equal to the cost of the repairs;
      • add the amount of the disbursements to the outstanding HECM balance when the
      payment is made; • after disbursing funds to pay for all required repairs, if
      there are excess funds in the Repair Set-Aside, send the Borrower with an adjustable
      rate HECM a notice which states the remaining funds are available in the line
      of credit, which the Borrower is encouraged to maintain to meet unexpected expenses;
      • reimburse Borrowers for the actual cost of repair materials from the Repair
      Set- Aside, but must not reimburse for any labor the Borrower performed; • not
      make additional funds available to the Borrower with a fixed rate HECM, regardless
      of any funds remaining after the funds are disbursed for repairs, except that
      a Borrower may be reimbursed for the cost of repair materials (not including
      labor); and • where the required repairs are not completed by the date specified
      on the Repair Rider, or any additional time as approved by HUD (not to exceed
      12 months from closing), suspend all payments until the repairs are satisfactorily
      completed. iii. Required Documentation The Mortgagee must retain in the Servicing
      File, copies of the following: • inspections after the required repairs are
      completed; • the completed and signed form HUD-92051; • a signed mechanic’s
      or materialman’s lien release, if applicable; III. SERVICING AND LOSS MITIGATION
      B. Title II Insured Housing Programs Reverse Mortgages 1. Servicing of FHA-Insured
      HECMs Handbook 4000.1 1461 Last Revised: 11/26/2025 • invoices or sales receipts
      for any materials that the Borrower ordered and paid and for which the Borrower
      is reimbursed; and • checks payable to the Borrower and contractors.'
  judgment: false
