We worked it out by refunding the deposit outside of the closing. We hope you're enjoying your new home Zach!

Had your lender known you were giving the EMD via credit card, he/she should have immediately let you know that is not acceptable. It's not just an underwriter giving you a hard time, that is an industry wide guideline.

I agree with Bob. Approach the builder to refund you the deposit outside of closing

good morning......you're not going to change the way the underwriter wants the deal to be written.... i suggest you approach the emd w/ the builder outside the p.a. on an addendum between the two of you......best regards....bob mcclure- success mortgage partners- plymouth, michigan....

Two interesting things here:

1. I was under the assumption that RD loans could not be used as construction loans, so that surprises me.

2. I've not heard of EMD by credit card before.

Yes, the lender is making the entire thing possible, so the disposition of the EMD is certainly important to them. They want to know that you HAD the $5,000 EMD, or that it came from somewhere. If you needed to cash advance it, and the money is going back to you, they then must cover an additional $5,000 ... OR the builder is going to have to eat it somewhere.

The underwriting constraints are what they are, and you are at their mercy.