Got my ATP yesterday for my FHA PFS. Yay!! Now I have to submit the preliminary HUD. The seller had accepted the offer with the buyer's request for $4000 contribution towards his closing expenses.

I read on the FHA guidelines they only pay up to 1% towards an FHA buyer's closing expenses. This is not FHA and even with the buyer asking for $4000 in closing expenses the bank would net almost $5000 over their 88% required net.

Just heard from the buyer that if the bank won't agree to the $4000 in closing expenses assistance, he's walking.  Does anyone have any experience to share about this? Will FHA agree to the $4000 or any amount?

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  • Push for the Servicer to request a variance.  $5000 is a bit high if it's over 3% of the purchase price, but is still likely to be approved when you're meeting the net tiered proceeds.

  • You should be in good shape.  The fact the min net is being met is what should push this towards approval.  Tell the lender you need a variance on the closing costs.  I would be surprised if you couldn't get this through....

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