HUD 232 escrow requirements

What are the Escrow Requirements for HUD 232 Loans?

What are the Escrow Requirements for HUD 232 Loans?

HUD 232 new construction loans require a working capital escrow of 4% of the loan amount. 2% of this, or half the amount, is a construction contingency escrow intended to help fund cost overruns or approved change orders that might occur. If, by the end of the construction process, the construction contingency escrow has not been used, it will be refunded to the developer.