A special deposit account is a specific type of account that borrowers are typically required to use when handling construction funds that are disbursed through a rehabilitation mortgage. Funds that are deposited into the special deposit account are used to pay building contractors and sub-contractors as work is completed. Borrowers are advised during the closing process if a special deposit account is required. Special deposit accounts are commonly utilized in conjunction with rehabilitation mortgages and mortgages that provide funds for some type of remodeling in addiction to the cost of the home. Lenders can monitor the activity of special deposit accounts and consistently oversee the cost of construction. This oversight allows lenders to keep an eye on budget adherence as well. After the property has been rehabilitated or remodeled, the special deposit account can be discarded.