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FHA Gift Fund Question-Odd Situation

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StartingOver10
Moderator Emerita

Re: FHA Gift Fund Question-Odd Situation

Your situation is different because you aren't getting gift funds to close that I know of - you are getting closing cost credit from the builder and a special program for housing in Colorado. Both of those items are allowed and neither of those sources are gifts. Both are properly sourced.

 

You don't have the seller paying for your down payment. That is coming from the housing authority in your state. It is a totally different thing than having the seller pay the buyer for a service and then having the buyer use those funds as the down payment.

 

I'm not putting words in your mouth at all.

Message 21 of 27
MovingForward_2012
Valued Contributor

Re: FHA Gift Fund Question-Odd Situation

No no no...I was saying that it isn't fraud if the buyer uses their own funds for closing and then the seller writes them a check for their rents credits after closing. That is what my mortgage broker said was okay to do. I totally understand the scenario you wrote is fraud. What I'm confused about is whether or not the scenario I wrote about is mortgage fraud.
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Message 22 of 27
MovingForward_2012
Valued Contributor

Re: FHA Gift Fund Question-Odd Situation

I should add that while my mortgage will be serviced by the housing authority, the loan for the first mortgage is being written up as an FHA loan by UAMC.
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Message 23 of 27
StartingOver10
Moderator Emerita

Re: FHA Gift Fund Question-Odd Situation

Yes, that is normal, to have the first as an FHA loan and the second with the housing authority (called different things in different states). Both loans are recorded, even if the second has a non-payment provision if you live there as your primary residence over X years. I don't know if your particular program has that provision, but many of the programs do have it where the loan is self liquidating within X years.

 

Your entire process has to be approved FHA which I thought I read you actually have your approval and are scheduled to close next week on Jan 30th.

 

For the OP, her situation is different. The loans go through a QC (quality control) check prior to closing and if there are any red flags it could be a real issue for the OP. Also, there is a certain amount of monitoring of the loan after closing. The part that is difficult for the OP is that her tenant/roommate actually did some work on the property that the OP has an agreement to pay for, yet the payment didn't come contemporaneously with the work. That will raise a red flag with the underwriter before closing and if it does close, it is likely to cause an issue if payments are received from the seller after closing. I don't wish anyone trouble. There has to be another way to achieve the goal without crossing any lines.

 

 

Message 24 of 27
MovingForward_2012
Valued Contributor

Re: FHA Gift Fund Question-Odd Situation

Okay. I guess this is starting to make more sense to me as the mortgage is intertwined with a unique situation. I am just wondering why a mortgage broker said it was okay for my landlady to give me my rent credits after closing when there is no rent to own contract in place. Of course, I decided not to buy my landlady's house, so I won't be receiving rent credits anymore. But my situation seems similar to OP's situation and in my case, the mortgage broker I talked to said I had to bring my own funds for closing and then my landlady could write a check for my rent credits after closing. That's why I am questioning the fraud claim in this scenario. Also I would have bought her house with an FHA loan so any fraud language about this scenario for FHA loans, would have applied to me.

All I know is that once UAMC sells the loan to CHFA, our housing authority, the first and second mortgage are both 30 year fixed at 4.125%. I am not aware of any special provisions at this time.

My loan is conditionally approved and I received my loan commitment letter on 1/17. I am still working to satisfy the conditions but I will have all the final paperwork faxed off by tomorrow. They set a tentative closing date of Jan 30th. I have my "meet the builder" meeting tomorrow morning which will start the walk through process. The contractors and cleaning crew will start finishing the house off tomorrow in preparation for move in.
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Message 25 of 27
JM-AM
Valued Contributor

Re: FHA Gift Fund Question-Odd Situation

First I think you owe me an apology as I wasnt the one posting.

If you are going to direct something at me MovingFoward then please let it reference me properly.

Have a great day!!
Good Luck
May all your dreams and wishes become a reality!
Message 26 of 27
Autumnslight
Frequent Contributor

Re: FHA Gift Fund Question-Odd Situation

Wow! Didn't mean to cause such a stir. Smiley Wink At any rate, some info has come to light that will probably make it a moot point anyhow. I'm probably going to just end up having to sell to a third party. Not the desired outcome, but certainly simplifies things in this respect.

Scores:
07/29/12: EX FICO (Amex) 684 | EQ MyFICO 631 | TU Walmart 695
Current: EX FICO (MyFICO) 733 | EQ (MyFICO) 683 | TU (Walmart) 745

First Goal: 700+ across the board - Got it on EX & TU!!!
Message 27 of 27
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