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HAFA policy limited buyer from put down more than 10% down payment

I'm in the process to purchase the short sale house. The seller bank (BOA) required that we could only put down less than 10% down payment to receive the closing cost credit that they promise us if we pay the whole price. Is there a policy/regulation in HAFA that limited the buyer from put down more than 10% down payment NOT to receive the closing cost credit that the bank promise? by thaitm_413_406 from Fredericksburg, Virginia. Jan 24th 2012 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

I believe that's a BofA requirement.. by putting more than 10% down, you are showing the bank you have enough money and don't necessarily need closing costs assistance. I have read the HAFA guidelines, and there is nothing in there limiting how much the buyers put's down... WilliamAcres.com

Jan 24th 2012
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Terri Hardin (USMCLoans4U)
#38 ranked lender in Virginia - 10 contributions

Have you received a letter approving the purchase of the short sale? If so it should reference the amount they have approved for concession. If you have received a short sale approval letter and they are now trying to change the concession amount I would consult an attorney (your agent may also be able to help you with this). The HAFA guidelines, from what I've read, do not reference down payment limits.

Jan 24th 2012
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

A seller will generally offer some form of credit for the buyers closing costs if there is a need for the funds so the buyer can close escrow on the transaction. If you are purchasing FHA with more than 3.5% down or conventional with more than 5% down, the seller could argue that you don't "Need" assistance with your closing costs. In this case, the bank is telling you if you are putting more than 10% down, they will not assist you with the closing costs, because you don't need the help, and since the help is coming out of their pocket, they have the right to tell you no. If you were thinking of putting 20% down to avoid the Mortgage Insurance, one option is to have your Mortgage Broker/Banker look for a lender that allows pre-payment and re-amortization. This way once the loan is funded with the seller credits, you should be able to pay down the principal to cancel the PMI and have the loan re-amortized to reduce your monthly payment. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Jan 24th 2012
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