The mortgage closing documents are executed and include forms or language prescribed by HUD. The date of the closing is the settlement date as it appears on the Settlement Statement - form HUD-1. Customary and reasonable closing costs and other fees are collected from the borrower.

Included in the closing documents is a Rehabilitation Loan Agreement establishing the conditions under which funds will be released from a Rehabilitation Escrow Account. The lender establishes the Rehabilitation Escrow Account and places in the account the amount required to finance the rehabilitation. After closing, the borrower begins making monthly mortgage payments on the entire principal amount of the mortgage and the amount in the Rehabilitation Escrow Account.