Both real estate agents receive their full commissions and the seller's funding check is disbursed at the closing, just like any other purchase transaction that involves a mortgage or cash buyer.

As this question relates to sellers and real estate agents, funds are fully disbursed on an FHA 203k loan at the time of closing. This is actually true for any residential renovation loan for an owner occupied property.

What this means for the seller is that the seller receives their full sales price as negotiated by the purchase contract, along with payoffs in full for any outstanding mortgage balance. Real estate agent commissions are also paid at closing based on the full sales price.

Basically, there is no difference in how the seller or real estate agents get paid on a 203k loan vs conventional financing.

As it relates to the buyer, the funds for the actual renovation budget are put into a separate interest bearing escrow account and is used by the contractor to draw down to pay for the project.

Video Transcript
On a FHA 203k or any renovation loan for that matter the seller of the property is gonna receive their proceeds at the closing. These programs are fully funded and fully dispersed at closing to the seller for what they are supposed to be paid off on. Also your real estate agents are gonna get paid for their real estate commission based upon the sales price at the time of closing. So really as I said it’s a fully dispersed loan, everybody’s getting taken care of, and the renovation budget that has been set, set aside and built during the loan process is gonna be set up into a separate escrow account, interest bearing escrow account that is going to be there for the client to be able to draw down and for the contractor to draw down as work is being completed. Listen thank you so much guys. I really appreciate you being here today on this podcast and this vlog, renovate this.