If the home you’re buying — or the one you already own — needs a few repairs, a repair escrow loan can be a great solution. Instead of taking out a separate loan or using a credit card, you can roll the cost of renovations into your mortgage. That means one monthly payment, less stress and a quicker path to moving in or making your space truly your own.

At PrimeLending, we offer several types of repair escrow options to fit different loan types and needs. But before we dive into the details, let’s start with the basics.

What is a repair escrow?

A repair escrow is a special account set up by your lender to hold funds for home improvements or repairs. These funds are set aside at closing and used only for the work outlined in your renovation agreement. Think of it as a built-in renovation budget, rolled into your mortgage — no separate loans or credit lines needed. This approach allows you to:

  • Bundle your renovation costs with your home loan
  • Make repairs right after closing, without delay
  • Keep things simple with one monthly mortgage payment
  • Ensure repairs are completed in a timely and structured way

Repair escrows are ideal when the property needs a few updates to meet lending requirements or just needs a refresh to fit your needs. Whether you’re buying a foreclosed property or negotiating repairs during a home sale, there’s a repair escrow option that can work for you.

Explore your repair escrow options

HUD REO with repair escrow

Looking at a foreclosed home? This loan could be your ideal match. HUD REO loans with a repair escrow are designed for homes owned by the Department of Housing and Urban Development (HUD). These properties are often more affordable, giving you flexibility to invest in improvements.

  • Finance up to 110% of the home’s appraised value, including repair costs
  • Repairs must be completed within 90 days of closing
  • Great option for turning a bargain property into your dream home

USDA repair escrow

A USDA repair escrow allows buyers — or refinancers — of eligible USDA properties to roll in the cost of required repairs into a single loan.

  • Combines purchase or refinance with needed improvements
  • One loan, one monthly payment
  • No need for additional lines of credit or out-of-pocket repair funding

Buyer/Seller-funded repair escrow

Need to make updates before move-in day? This option allows either the buyer or the seller to fund the repair escrow — great for borrower-requested improvements or negotiated fixes.

  • Flexible funding source
  • All costs bundled into one mortgage
  • Perfect for quick upgrades or required repairs before closing

Repair escrows can be a smart, flexible way to make a house feel like home — without stretching your budget. If you're ready to explore your options, connect with a PrimeLending loan expert today. We’re here to walk you through the process and help you find a home loan solution that fits your needs.