The lender approves every reserve release, and must certify condition and compliance before any surplus cash reaches the owner

rd538.financial.reserve_releases_and_surplus_cash_distributions_require_lender_certification · v1.0.0

The lender is responsible for approving or disapproving ALL borrower requests for release of funds from the reserve and escrow accounts; security deposit accounts are not treated as reserve or escrow accounts for this purpose. Before any distribution of surplus cash to the owner, the lender must certify that the property is in good financial and physical condition and in compliance with the regulatory agreement, and that compliance expressly includes payment of outstanding obligations, debt service, and required funding of the reserve and escrow accounts. The regulatory agreement executed at closing must bind the borrower to make all payments due under the note and to the required escrow and reserve accounts.

Confidence

high

Effective from

1998-07-22

Last reviewed

2026-08-30