!!Help!! Is it true that FHA will not Alllow FHA Buyer to pay negotiating fee??

Hi Everyone,

I have a short sale I am processing and my short sale company does short sales for a fee. The buyer is switching to a 203K instead of a conventional loan because thr conventional appraiser called for repairs to be done. The Buyers loan officer told me that is is an FHA rule that the buyer cannot pay a short sale negotiating fee! Does anyone else know for certain if this is accurate? Also, in my paperwork it is actually called a processing fee-should that make a difference? Thanks!!

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Thanks so much Kevin, I'm going to use that sheet for my fha shortsales. In this case though, only the buyer is fha, not the short selling loan.

For purchase transactions, FHA does not permit the borrower to bring additional funds to close to
pay any portion of the seller’s liens or short sale fees – For example, if a seller owes $120,000 on
an existing property, and the sales price is $100,000, the borrower may not pay any portion of the
remaining $20,000 on behalf of the seller 


o Borrowers may pay a reasonable and customary short sale negotiation fee subject to all of
the following requirements:
 Reasonable and customary fees are ≤ 1% of the purchase price

https://download.flagstar.com/retail/hlguide/pdf/r6001.pdf

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