Lender requires repairs prior to close

[Bruce Harney]

I'm trying to buy a duplex and the seller is giving me a credit at close to replace the siding of the building. The lender is stating the repairs need to be completed prior to close but the seller does not want to do this. They want the lender to escrow the funds to repair the siding and distribute to contractor when work is complete after the sale.

My question: is it normal for a lender to escrow the funds and allow the work to be completed after the close?

[Bruce Harney]

I wanted to provide an update to this post. I closed on the property in August, 2013 and the lender(local bank) allowed the funds($25,000 seller credit) to be escrowed to complete the siding work after close. The property is a duplex about 30 steps to the beach and 1/2 hour from downtown Tampa. We live in one unit and rent the other as a vacation rental and almost make enough to cover PITI. We are refinancing now and the property appraised for $150,000 more than we paid for it so this turned out to be a great investment. Thank you everyone for all your suggestions and input!