As all of you are aware houses are not selling as fast as they were before and sellers are taking less money and negotiating and paying closing costs or buying down rates with discounts and helping borrowers make transactions work. So if you are finding yourself short funds, go FHA

When someone purchasing a home has some reserves but not enough for the down payment and closing costs and they want to keep the interest rate as low as possible they do have options.

With FHA you can get 6% in seller concessions vs the 3% max that conventional allows which can make a deal work and the rate can be substantially lower on an FHA loan even with the MI differences and can be a great deal for a borrower.

FHA (Federal Housing Administration) seller contributions refer to the amount a seller can contribute towards the buyer’s closing costs, prepaid expenses, discount points, and other concessions. These contributions are regulated by FHA guidelines and are subject to certain limitations.

FHA allows seller contributions of up to 6% of the home’s purchase price of buyers closing cost and prepaids. However, these contributions cannot go towards the buyer’s down payment. Seller contributions are typically used to cover the buyer’s closing costs, such as loan origination fees, title insurance, appraisal fees, and prepaid expenses like property taxes and homeowner’s insurance. In your area the sellers normally pay for certain closing fees such as documentary stamps on the deed transfer, owner’s title and the survey. So this 6% could actually be more than enough than what the closing cost and prepaids actually are. When this is the case we can in most cases use the remaining contributions to get the purchaser a lower rate by applying the remaining fund towards a discount

It’s important for buyers and sellers to be aware of FHA regulations regarding seller contributions, as exceeding the allowable limit can lead to complications during the home buying process. Buyers should also consult with their lender to understand how seller contributions may affect their mortgage loan.