On cash-out refinancing’s there is a 50% cash-out holdback post-closing until any needed repairs are completed: It is often possible to obtain a waiver to lower the holdback. The 2020 MAP Guide simplifies the test for when waiver can be requested: when the holdback is $1M+ . BUT it adds a requirement that the repairs be “minimal” in order that there be a waiver possible.
However, while the covid pandemic persists, the whole scheme is different: 9 months debt service reserve+ 250% of repairs, so where repairs are not high this holdback is much less than 50% of cash out.
For cash-outs on projects built within the last three years, 50% of the available cash must be held by the Lender as a debt service reserve until such time as the property achieves the applicable minimum debt service coverage for six consecutive months (which can include pre-closing months.) While the COVID DSRF/repair escrow still applies, first cash out is applied to that combined escrow and the balance of the 50% is then held in a cash holdback escrow, with a different timeframe from the COVID escrow.