great offer from builder??

[buyhouse36]

Great! As long as it is legal!!! I just want closing fees, refrigerator, washer , dryer and rest to debts. I will call the builder to see if he has a loan company prepared to execute his offer.  I dont need $$$ personally as long as bills are paid. My concern is that we have very aggressive payment arrangements with many of our creditors because many of the accounts are closed and we negotiated lower interest rates if we agreed to pay them off quicker. So getting approved for 140-150K seems unlikely. And if lenders dont want to hear about the 'rebate/incentive',  then it cant be factored in at all.

[Anonymous]

Jsut to clarify, there is no guarantee that they will allow debts to be paid at closing. They did that in my case, but we still had to be under 6% max seller contribution (not 20%).  I don;t think underwriters really like this practice, but I think some will allow it.  The big no no is of course cash back to buyer, but they do generally like to see a buyer being able to handle their own debts.  It is kind of a red flag if the seller has to help pay them to get DTI down or whatever.  Just talk to the lender/Lo and see what they will allow.  I Knwo in my case the UW made it a condition of approval that one large and one small collection be paid off but allowed it to come out of escrow funds.

[buyhouse36]

The USDA website states "Unlimited seller contributions" so I dont think "6% max" applies. I will call tomorrow.  I dont need $$$ in my hand personally.

Thanks a million!!!

[Anonymous]

Yeah, just check with the lender as it is up to the lender and the program what they will allow (as well as the underwriter as they may not allow them even if it is nto against the loan program rules)

[buyhouse36]

One more question for you??

Was the $$$ in escrow that paid the collection from the seller???

What were your credit scores at the time??

Was this recently??

[Anonymous]

Our Underwriter put as a condition to close that 2 old collections had to be paid off.  We thought we were going to have to pay them ourselves but due to a change in a few fees and schedules, we ended up with extra money in escrow.  Since the seller agreed to an exact amount of monetary concessions, that money was "ours" to use as long as we did not recieve cash back.  We could have had a couple new appliances or something along those lines but instead we asked the UW if they could just go ahead an dpay those bills.  They said as long as we were not recieving cash back and it did not go over the max (6%) I believe cap on seller concessions then it was fine.

This was in September/October.

Credit scores were mid to high 600's

[buyhouse36]

I Just called the local USDA rural developement office. They said seller contributions are unlimited. But they dont want to hand any $$$ to the buyer. But if there are other expenses that the seller is willing to pay....Fine..as long as it appraisses OK.

[DallasLoanGuy]

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@buyhouse36 wrote:

I read several  news articles regarding the housing crisis. In ALL articles that discussed new home builders, they openly discussed BMWs, vacations, rebates/incentives being offered to clear inventory. Builders cant lower prices because it will affect their construction loans. But it is legal to offer "incentives' to new home buyers.

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very legal... if disclosed to the the lender who will DENY the loan for this.