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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.
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.
Wow! Didn't mean to cause such a stir. 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.