Final inspection. Sign off. And the last draw.

This is the exciting final stage of your 203k renovation. Here is exactly how it should happen.

When the contractor tells you the job is complete. Do not call the consultant yet. First do your own thorough final walkthrough. Go through every room. Test every light. Outlet. Door. Window. Appliance. And fixture. Create your own detailed punch list of anything that is unfinished. not working. or not up to your standards.

Give that punch list to the contractor and have them complete every item. Only after the punch list is fully finished should you schedule the HUD consultant for the final inspection.

During the consultant’s final inspection they will verify that all the original work write-up items. plus all approved change orders. have been completed.

Before the final draw can be released you must also confirm two important things. All building permits have been finalized. closed out. and turned in to the city. Every single change order has been submitted. signed. and fully completed.

Once the consultant confirms everything is done. and you are personally happy with the finished work. you give your final approval. Only then does the lender release the last draw. This payment includes any remaining renovation funds and unused contingency money.

The contractor must also provide final lien waivers from themselves and all subcontractors before the last payment is sent.

After the final draw the lender closes the renovation escrow account. Any leftover contingency funds are usually applied back to your loan. which can slightly lower your monthly payment.

Pro tip. Take your time on your initial walkthrough and punch list. This is your last best chance to get everything fixed while the contractor is still motivated. Do not rush this step.

When you finally sign off on the last draw you can truly celebrate. The renovation is officially complete. Your house is finished. And you now have one normal mortgage payment with no more construction chaos.