hud home escrow hold back loan for repairs

[Chris Igard]

We are going to purchase a HUD home and will be using an FHA escrow loan to fix a few things. I am aware that the maximum amount that can be used is 10k, but here is where I have a hang up. My lender has informed me that the money used to repair the home is taken out of my pocket in order to make the repairs. I was under the assumption that it was rolled into the loan. So if the house we are buying costs 100k and we have 10k in repairs we have to come out of pocket at closing with the down payment and an additional 10K. Does that sound right? I've read that it is rolled into the loan. Thanks for the help