Home Buying in Columbus>Question Details

Jaleesa Lee, Home Buyer in Columbus, OH

Can the seller pay the buyers down payment?

Asked by Jaleesa Lee, Columbus, OH Sat Aug 9, 2014

Scenario - We were approved for a loan for 150,000. There is a house on the market for 100,000 but it was appraised for 115,000. I read that typical closing costs are about 6% of the purchase price and with an FHA the down payment would be 3.5%. Could we negotiate to have the seller pay the down payment and closing costs if we offered the full appraisal price of 115,000? So the seller would net 105,000 and the remaining would go towards paying all closing costs and down payment.

Sorry, it may sound like a stupid question. :)

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Answers

3
The most a seller can contribute on FHA loans is 3.5% of seller prepaids and closing costs. Talk to your lender, your Realtor and the seller to see what your options are.
0 votes Thank Flag Link Thu Aug 14, 2014
The quick answer is no. That's not possible. Not unless the seller is family then they can gift equity as your down payment. An unrelated seller wouldn't work. Otherwise, family can gift you cash for your down payment or the local housing authority may have programs for down payment assistance. Maybe if your income is eligible and if you're trying to buy in an eligible area maybe USDA is more of an option for you (100% financing) - or if you're a veteran but I'm sure you've explored those options. If I can answer any add'l questions, I'd be happy to help. Best wishes otherwise, Kimberly Lawson, Licensed Mortgage Loan Originator - Ohio only. Contact and licensing information can be found on my profile.
0 votes Thank Flag Link Thu Aug 14, 2014
It's not a stupid question. If your Realtor and/or lender ever make you feel like you're asking a dumb question or if they tell you it doesn't matter or it's not important, find a different service provider. If you're bothering to ask, it matters and it is important.

Your lender is going to be your best source of information about how you can minimize your down payment. There may be down payment assistance programs or grants for which you qualify. Some programs require that the homebuyer take classes.

Your city or county may offer some kind of homebuyers assistance programs, so check the sites.

Please keep in mind that some programs have a limited amount of funds, so check availability. If funding has run out for the year, ask if you can be added to a wait list for when funds become available again.
0 votes Thank Flag Link Sat Aug 9, 2014
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