The package includes no down payment with up to 6% seller contribution
, waived application fee, and additional cash incentives, including a $200 Visa Prepaid Loyalty Card, cash back of $5,050 with RealtyPlus(1), and a rate match(2) guarantee.
1, 2005 Summary of borrower's Summary of seller's transaction transaction Contract sales price Contract sales price $970,000 Settlement charges Assessments paid by Assessments paid by seller in advance seller in advance Gross amount due from Gross amount due to seller $970,000 borrower Earnest deposit Settlement charges $15,460 Principal of new loan Loan payoff $100,000 Q1 exchange funds Q1 exchange funds $834,028 Seller contribution Seller contribution
$20,000 Assessments unpaid by seller Assessments unpaid by seller $512 Total paid for borrower Total reduced from seller $970,000 Cash from (to) borrower Cash to (from) borrower $0 Exhibit 2: Purchase of new property by taxpayer (borrower)--settlement date Feb.
Up to $600 seller contribution
toward a 2-year home warranty plan (independent home warranty provider of buyer's choice).
Seller-paid closing costs subject to seller contribution
: A seller contribution
toward the purchase price may be used for down payment and closing cost requirements.
Fannie Mae guidelines said that seller contribution
could not exceed 3 percent, and therefore, it said the extra $300 for counseling was excessive.
It can be a true no-cash-out-of-pocket loan," explains Lee Farrell, a product manager at North American Mortgage Company, "because the remaining three percent, or down payment, can come from a gift, grant, unsecured loan, personal loan, seller contribution
, or 401(k).
3) Maximum allowable Seller Contribution
on 97% LTV loans is 3%.
Borrower may use cash, gift or seller contribution
for closing costs
The borrower may also use a gift or seller contribution
to pay closing costs, resulting in cash-to-close well below alternative conventional or government loan programs.
B) If a buyer is "slim on cash to close" you can bump the sales price up to cover the closing costs completely as long as it doesn't exceed the 3% to 6% seller contribution
The sellers being eager to not have to hassle with lock boxes, and multiple open houses, and a variety of offers, happily accepted this price as it was a conventional loan where the buyer did not ask for any seller contributions