diff --git a/module_build_service/scheduler/consumer.py b/module_build_service/scheduler/consumer.py
index af856eb4..4661a507 100644
--- a/module_build_service/scheduler/consumer.py
+++ b/module_build_service/scheduler/consumer.py
@@ -110,7 +110,8 @@ class MBSConsumer(fedmsg.consumers.FedmsgConsumer):
             koji.BUILD_STATES["DELETED"]: NO_OP,
         }
         self.on_module_change = {
-            models.BUILD_STATES["init"]: NO_OP,
+            models.BUILD_STATES[
+                "init"]: module_build_service.scheduler.handlers.modules.init,
             models.BUILD_STATES[
                 "wait"]: module_build_service.scheduler.handlers.modules.wait,
             models.BUILD_STATES["build"]: NO_OP,
diff --git a/module_build_service/scheduler/handlers/modules.py b/module_build_service/scheduler/handlers/modules.py
index bb1eb075..8861d80c 100644
--- a/module_build_service/scheduler/handlers/modules.py
+++ b/module_build_service/scheduler/handlers/modules.py
@@ -30,7 +30,9 @@ import module_build_service.utils
 import module_build_service.messaging
 from module_build_service.utils import (
     attempt_to_reuse_all_components,
+    record_component_builds,
     get_rpm_release_from_mmd)
+from module_build_service.errors import UnprocessableEntity
 from module_build_service.builder.KojiContentGenerator import KojiContentGenerator
 
 from requests.exceptions import ConnectionError
@@ -122,6 +124,26 @@ def done(config, session, msg):
     build_logs.stop(build.id)
 
 
+def init(config, session, msg):
+    """ Called whenever a module enters the 'init' state."""
+    build = models.ModuleBuild.from_module_event(session, msg)
+
+    build.transition(config, "init", state_reason="Checking out the module components")
+    session.add(build)
+    session.commit()
+
+    try:
+        mmd = build.mmd()
+        record_component_builds(mmd, build, session=session)
+        build.modulemd = mmd.dumps()
+        build.transition(conf, models.BUILD_STATES["wait"])
+    except UnprocessableEntity:
+        build.transition(conf, models.BUILD_STATES["failed"])
+    finally:
+        session.add(build)
+        session.commit()
+
+
 def wait(config, session, msg):
     """ Called whenever a module enters the 'wait' state.
 
diff --git a/module_build_service/utils.py b/module_build_service/utils.py
index b27a4715..ffec77b2 100644
--- a/module_build_service/utils.py
+++ b/module_build_service/utils.py
@@ -760,6 +760,13 @@ def format_mmd(mmd, scmurl, session=None):
             raise UnprocessableEntity(err_msg)
 
 
+def validate_mmd(mmd):
+    for modname, mod in mmd.components.modules.items():
+        if mod.repository and not conf.modules_allow_repository:
+            raise Forbidden(
+                "Custom component repositories aren't allowed")
+
+
 def merge_included_mmd(mmd, included_mmd):
     """
     Merges two modulemds. This merges only metadata which are needed in
@@ -938,10 +945,8 @@ def submit_module_build(username, url, mmd, scm, yaml, optional_params=None):
             **(optional_params or {})
         )
 
-    record_component_builds(mmd, module)
-
+    validate_mmd(mmd)
     module.modulemd = mmd.dumps()
-    module.transition(conf, models.BUILD_STATES["wait"])
     db.session.add(module)
     db.session.commit()
     log.info("%s submitted build of %s, stream=%s, version=%s", username,