NRMLA: Seller Concessions Should Be Allowed in H4P
NRMLA is asking the Federal Housing Administration to remove the restrictions on seller concessions in connection with HECM for Purchase transactions, according to comments submitted last week.
Mortgagee Letter 2009-11—which implemented HECM for Purchase—prohibits seller contributions (also known as “seller concessions”), such as the use of loan discount points, interest rate buy downs, closing cost down payment assistance, builder incentives, gifts or personal property given by the seller or any other party involved in the transaction. This includes customary charges that are normally paid on behalf of the borrower by the seller.
“We suggest that allowing seller concessions in HECM for Purchase loan transactions will not place the MMIF (Mutual Mortgage Insurance Fund) at risk, and that HECM seniors should be allowed to benefit from such seller contributions similarly as do forward mortgage FHA single-family purchase money borrowers,” says NRMLA.
To read a complete copy of NRMLA’s comments, click here.
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