Profile picture for user6888265

Can seller concessions be applied toward my 3.5% deposit on an FHA loan?

I'm a first time home-buyer currently in escrow with a pending FHA loan. I've already paid a 3% good-faith deposit into escrow. My accepted offer included $12,000 in seller credits to be applied to closing costs. Based on inspections, we've asked the seller to concede more, and they've accepted. Only problem is, our credits now exceed the closing costs.
My question is: Can I apply some of the concession credits to the remaining .5% required as a downpayment on the FHA loan?
  • August 07 2012 - Los Angeles
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Answers (4)

Profile picture for daveskow
definitely not

suggestion-
maybe apply the credit towards the FHA  UFMIP...( upfront mtg ins premium)
  • August 07 2012
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Profile picture for daveskow

111

  • August 07 2012
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You must contribute minimum 3.5% toward the transaction. 12000 is a huge credit amount, what interest rate are you getting? FHA rates make it very easy for lender to provide large credit to cover most/all closing costs, you might dk better to look at that option and perhaps amend to a lower sales price. As Dave mentioned you also could look to get the UFMIP paid instead of financed.
  • August 07 2012
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Use the extra credits to buy down the interest rate; much more bang, than lowering the sales price.
  • August 08 2012
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