MRF/BUY DOWN

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  • #70798
    jkp2020
    Participant

    Can a family member or friend gift you with your minimum required funds (MRF) and/or buy down amounts?

    #70799
    Nelsont
    Member

    Technically and yes.

    Mrf is based on what they see you have saved however since bonuses can be used for mrf I would be inclined to say yes you can receive a gift.

    For buy down you definitely can receive a gift.

    If you receive a gift for any reason you will need to have it heavily documented and write LOEs and be prepared for the gifter to possibly provide something as well like a statement or loe.

    If you plan on receiving a gift for buy down the transaction needs to happen before credit access otherwise your contract will be held up and shelved until you have the money. Ideally your MC will be aware of your plans or you could run into a situation where they don’t think you have the money to buy the house and may or may not issue a psl. The automatic psl generator on the webfile does not allow buy down so all situations with buy down will require an MC review.

    #70806
    gfelix89
    Participant

    Hi so we are currently going through the NACA program and we are a little confused on the interest rate buy down amount. Our mortgage counselor is the worst at explaining anything to us and only tells us to sign everything ASAP only to move everything forward. The question that i have right now is that we are purchasing a brand new home and the builder or seller is giving a $15,000 incentive towards whatever we want to use it for. I told our mortgage counselor that i wanted to use that money to buy down the rate and that we would also be contributing 5% towards the rate buy down. Everything was going well and he had submitted our loan to the bank with a final interest rate of 0.875%. Well now he states that the whole total that we can bring down the rate is only 5% because my husband is at 100% of the income limit leaving us with a final interest rate of 1.875. I really hope you can explain this further to us. We would really appreciate your response and to hopefully have a piece of mind when making the final decision.

    #70815
    Nelsont
    Member

    Buyers are limited by the fhfa to buy down 5% with their own funds. Is it possible your MC misunderstood that you have 5% plus $15000?

    There is no income limit just to buy a house. Do you know which limit your MC was referring to?

    #70825
    gfelix89
    Participant

    The MC only said that we will be using the sellers $15,000 and that we would add an additional $1,993 from our money to total to the 5% of the home. He said that because my husband makes too much money, any more money that we put out of pocket would only go towards the principal. So when we went through the program they told us that the seller can contribute some money to buy down the rate and that we could only buy down a total of 5% using our money on the side, but now he changed it saying that our money has to come together with the sellers incentive money for a total of 5%. I hope this makes sense. I know a few people on here talk about how much they make…like between 80% and 100%. Well they told my husband he’s at 100% or more on his income. I wish i could tell you more but it just wasn’t explained to us.

    #70827
    gfelix89
    Participant

    And to answer your question, the MC knows that the seller is giving $15,000 and that we also were planning on using our money to buy the interest rate down an additional 5%. That is how we had gotten our final numbers the first time when we spoke to him leaving us at a 0.875 interest rate. BUt now he says due to my husband’s high income, we can only go down to 1.875?

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