Sarah, Home Buyer in Denver, CO

Can a seller give the buyer cash back after close if they are a relative and it's a gift reported on form 709?

Asked by Sarah, Denver, CO Tue Mar 24, 2009

Loan docs were accurate, loan officer was aware of cash after close, said that wasn't relevant to the loan, FHA appraisal was for 195k, purchase price is 184k, 15% GOE to be reported on 709 as well.

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4
Ritchy Haynes, , Denver, CO
Wed Sep 25, 2013
No everything must be accounted for on the settlement statement!
0 votes
Darrick Gill…, Agent, Englewood, CO
Mon Sep 23, 2013
NO... Definitely NO... This has to be on the HUD and if not will be fraud. Gift funds are given upfront not on the back side as cash back. Disclosure is best to cya...
0 votes
Robert McGui…, Agent, Denver, CO
Mon May 20, 2013
Sarah,

Gift funds should be given up front according to the lender's guidelines. Anything you do under the table or after the closing that is not reported and listed on the HUD could be considered loan fraud since the type of loan would be affected by the funds. Check with a real estate attorney if you still have questions that are troubling you. Your lender might be correct that what happens after closing would not be relevent, but when you bring it up during the process it raises red flags. All the best.

Robert McGuire
Broker/Consultant
Your Castle Realestate
http://about.me/robertmcguire33
0 votes
Sarah, Home Buyer, Denver, CO
Tue Mar 24, 2009
Thank you so much for taking the time to respond.

That's where my confusion came in. The lender said what she decides to do with her money after the close is her business and that is between us, and will be her responsibility on her taxes. Which made sense to me but given some of the information I've seen and that I can't control the HUD, I wanted to ensure that I'm doing everything I'm supposed to.
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