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What is the maximum allowable seller contribution on conventional loan in Texas 2014

by george_eden315 from Aliso Viejo, California. Mar 6th 2014 Reply


John Moran (SimplifyMortgage)
#8 ranked lender in Arizona - 663 contributions

The answer depends on occupancy and loan-to-value. Is this a primary home, investment property or second home? What percent is the down payment?

Mar 6th 2014
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Hans Bruhner (hans@asktheloanman.com)
#207 ranked lender in California - 18 contributions

The maximum allowable contribution from the seller (and/or Realtor) depends on the down payment and occupancy. The rules I am quoting are Federal rules for a Fannie Mae conventional loan:For an owner occupied or second home with less than 10% down the max contribution is 3% of the lesser of the sales price or appraised value.If you put more than 10% down and less than 25% down the max contribution is 6% of the lesser of the sales price or appraised value.If you put down more than 25% down the max contribution is 9% of the lesser of the sales price or appraised value.For a non-owner occupied home the max contribution is 2% no matter how much you put down.Remember that when getting a seller credit, the house needs to appraise at the price you agree to pay for the house or you will have an issue. For example, if you want to buy a house for $200,000 and you expect to have closing costs of $6,000 and you decide to offer $206,000 with a seller credit of $6,000, the house needs to appraise at $206,000 to make that deal work.Rarely will you need more than 3% and even if you could spend it, going over 9% will be almost impossible to make work as the appraiser needs to know about the credit and make comments that it is normal practice and in 25 years in this business, it has never been normal.If you need a home loan in CA or you want to discuss in more detail, call me at (866) 385-1650 x 1

Mar 6th 2014
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Kiernan Brown (KiernanBrown)
#50 ranked lender in Michigan - 149 contributions

great Answers below.

Mar 6th 2014
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,728 contributions

anywhere from 0 to 9% depending on what percentage of down payment your applying to your loan and the occupancy type.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Mar 6th 2014
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