Can seller pay for closing costs if I'm using a USDA loan?

Asked by kthpkns, Milton, WV Wed May 22, 2013

Basically, I'm trying to figure out all of the immediate expenses associated with buying a house (I'm a first-time buyer). I've been pre-approved for a USDA loan, and am planning to go this route. If I'm correct, I'll need to pay for three things (for sure) out-of-pocket: an inspection, the appraisal, and earnest money. Can the seller pay for closing costs if I'm using a USDA loan, or do I need to plan on having those funds available, as well? Also, are there any other expenses I'm not considering?

Thanks so much for any help!

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6
John Short, , Huntington, WV
Wed Oct 16, 2013
Another idea is to use the West Virginia Housing Down Payment Assistance Program in conjunction with a RD Loan. We are a Lending Partner with WV Housing. So if the Seller is not willing to pay toward your closing costs you would get a 2nd Deed of Trust to cover these fees. Total Loan cannot exceed 103% of Purchase Price.
1 vote
Terry Farnsw…, Agent, Lisle, IL
Wed May 22, 2013
Generally, with USDA financing, it does not matter who pays the closing costs - so yes, they can be conceded by the seller. Keep in mind however, that although it's called a "concession" - what you are often doing in reality is simply raising the the purchase price and rolling them into the loan. So, the seller is "paying" them, but you are paying the seller a higher purchase price as a result. You are basically financing them into the loan. You have to be careful with the purchase price in these instances because 1. You don't want to overpay for the property, and 2. You want to ensure it will appraises out for the lender - or the loan will ultimately be denied barring renegotiating or a successful "fight" of the appraisal results by the agents involved.

I would check with your lender for the specifics in your area, and for the specific property in question because this may affect the answer.

Hope that helps!
1 vote
, ,
Mon Jul 15, 2013
Yes, the USDA Rural Housing Program allows sellers to pay closing costs for buyers. These costs can include state and local government fees, lender costs, title charges, and any number of home and pest inspections.

Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
kentuckyloan@gmail.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com
Web Reference:  http://kentuckyusdaloan.com
0 votes
Craig Zappin, Agent, Huntington, WV
Thu May 30, 2013
Typically, the seller can contribute up to 6% of the gross sales price toward the buyer's closing cost for a USDA loan. Here is a link that provides some additional information related to closing costs and USDA loans.

https://www.lender411.com/mortgage-articles/4866/6-ways-to-p…
0 votes
Rita Smith, Agent, Huntington, WV
Thu May 23, 2013
Yes the seller should be able to pay the closing cost with a USDA loan. Hope this helps you if you have any other questions I would be glad to help you.
0 votes
Lorre Wilson, Agent, Barboursville, WV
Wed May 22, 2013
Your lender can give you that answer
0 votes
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