My New Blog

We're trying to get a young first time buyer couple to the closing table without addingto their down the road burdens. The problem is that what we would like to do isn't permissible.

The inspection brought up some items that do not directly effect the ability to close on time or the quality of life the young couple will enjoy. What it does do, however, is cause them to postpone doing some repairs to the home, detached garage, etc until they can come up with the money. The conventional alternatives would be to request seller concessions, which raises the mortgage and has a cap of 6% with an FHA mortgage. The other alternative would be to get a 203K rehab loan, which is not much different to the overall mortgage than seller concessions.

What we really need is a seller gift, or cash back at closing that doesn't impact the mortgage and would also not rely on the appraisal. The sellers have already agreed to the money requested, our problem is getting it back to the buyers without penalizing them.

There used to be the AmeriDream program which allowed the sellers to make a cash back grant to the buyers, all perfectly proper within the HUD. Unfortunately, the program ended and the new administration hasn't renewed it.

We no longer have the Federal Tax Rebate program to assist home buyers with a cash 'bonus' to help with the necessities that extra cash affords new home buyers when they first move into a house.

How great would it be if the seller, anxious to get their house sold, would rebate, voluntarily, some of the proceeds to correct those items that they new were questionable? This would be a grant available to all buyers, not just first timers. Everybody would walk away happy. The HUD would be satisfied and the monthly obligations of the new buyers would not be increased as they normally would be with the options currently available.

What's wrong with a seller's give back grant? All that would be needed would be a gift letter, much the same way the banks allow a relative to gift funds before a transaction is completed. This program would allow the sellers to gift funds after the transaction, sort of a generous house warming gift.