203K problems after closing

[Justin C Huggins]

I recently closed on a 203K loan and after all the paper work finally thought I was done once I closed.  About a week after closing I heard from my contractor and he had not received any funds to start the project.  My loan officer said he should have received the first disbursement payment once he signed his portion of the closing docs.  I specifically asked the loan officer during the bid process how the loan worked and if the contractor could receive upfront costs for materials.  He specifically told me that the renovation team could provide upfront disbursement.  Well now after closing the renovation team is saying they cannot provide any upfront costs.  Also, my contractor will not start any work without at least some kind of funds upfront.  On top of this, the contractor has not signed all of his portion of the 203k packet, only partially and I have already closed the loan.  Basically this has been a huge mess and feel like I been lied too.  Is there anyway I can get out of this, such as them just applying the renovation portion of the loan to the principle and refinancing?  Any suggestions, as of right now this is going nowhere.