FHA may increase allowable closing cost credits

Here's some good news that should help make selling (and buying) a home a little easier:

Last year the Federal Housing Administration (FHA) announced that it intended to cut the maximum seller contributions from 6 percent to 3 percent for purchasers using FHA-insured mortgages. Seller concessions or contributions are oftentimes a critical component to FHA-financed transactions since many buyers need the seller credits to pay for closing costs. They make otherwise unaffordable deals affordable by allowing buyers to use their cash towards down payments and allowing sellers to pay closing costs.

FHA is now considering a more flexible approach that may vary from region to region. We won't know until a formal announcement is made in April. But the fact that they are reconsidering is a good sign as 3% doesn't always cover all closing costs and with buyers already strapped for cash, many deals that would have otherwise fallen apart, may now be within reach.

 

Casey
Edmonds, WA

 

 

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Casey Bui, MPA
Managing Broker,
Residential Real Estate Division
Rockwell Realty
(206) 234-5611
caseybui@gmail.com

3 comments • Casey Bui • March 04 2011 01:23AM