General Information about Seller’s Assist
Seller Assist (aka Seller Credit) is payment by seller or builder of settlement costs that are normally paid by the buyer. Any closing costs that are normally paid by the borrower are considered contributions if they are not paid by the borrower. Contributions toward any of the following are included in the maximum allowable limits for seller assist. The type of loan program determines maximum seller assist.

Seller Assist may be used to cover the following items:
• One time closing costs:
• Discount points or origination points (a point is 1% of the loan amount).
• Commitment fees
• Origination fees (origination, underwriting, doc prep, processing, etc)
• The initial mortgage insurance premium or a one-time mortgage insurance Premium
• An interest rate buydown plan for the purpose of temporarily or permanently lowering the borrower’s monthly payment or mortgage rate
• Transfer-related charges normally paid by the buyer; for example transfer taxes, tax stamps, costs of title insurance policies and surveys, recording fees, and attorneys’ fees if buyer is utilitizing an attorney.
• The costs of any other items related to the transaction that are traditionally paid by the borrower; for example, application fees or appraisal costs.
• Homeowners’ Association (HOA) fees paid directly to the Homeowners’ Association for future dues. This includes capital contribution fees, one time move-in fees, and normal pro-rates of HOA dues accounted for at settlement
• Per diem interest on buyer’s purchase mortgage(s).
• Prepaids and customary lender escrows:
• Reserves deposited with lender (lender scrows) for future Real Estate taxes, homeowners insurance, flood insurance, & mortgage insurance escrows
• Prepaid Eeal Estate taxes normally prorated for reimbursement to seller (section 100 items on HUD-1).

What a seller assist cannot be used for:
• Seller assist cannot be used to meet minimum required down payment of buyer’s mortgage product/program.
• Seller assist cannot be used to substitute for any of buyer’s down payment.
• Seller assist may not be received as cash at closing by buyer or other interested party (no cash rebates to buyer).

EXCESS SELLER CONTRIBUTIONS
For underwriting purposes on conventional loans, a downward adjustment to the property’s sales price must be made to reflect the amount of any contributions that exceed contribution limits. The maximum Loan to Value/Total Loan to Value/Combined Loan to Value (LTV/TLTV/CLTV) ratio must then be calculated based upon the lesser of the reduced sales price or the appraised value. Seller assists that exceed the maximum limits on explicitly government backed loans (FHA, VA, RD) are generally not permitted.

Changes to initial seller assist amount during transaction.
Changes to seller assist amount generally need to be approved by loan underwriter and also acknowledged by appraiser as having no impact on value of property (prior to settlement).. In some cases, lender will have to re-evaluate buyer’s funds–to-close documentation. Therefore, avoid last minute seller assists at settlement table whenever possible!