203k contingency reserve...who gets it now??

[Kyle Gregg]

Hello everyone,

I am wrapping up a 203k right now and the final draw is pending. My full 203k had a contingency reserve for 10%. My loan originator initially told me that this contingency reserve could either be put back towards principal or released to me. My new loan officer is telling me that it has to be put back towards the loan.

I was hoping to see the contingency reserve at the end of my rehab to complete extra work that was outside of the SOW.  

Is there any FHA regulations, forms, etc that can explain the rules for using the contingency reserve?

Thank you,

Kyle