I have a question that may not be specific to a NACA purchase but to any house purchase. How does a seller contribution work? Does the seller actually have to have the funds in Cash (their bank account)? or, would the Lender just deduct it from their payout (The amount the house sold)?
thank you Tim for the clarification to this one as well, now a question that would be more an opinion, what do you think it’s better? to make an offer for full amount with seller contribution? or make an offer for what the seller would actually get and after agreeing on a price tell them that the price can be raised for whatever contribution we want?
The FAR better option is make an offer for full amount with seller contribution. There are actually some tax advantages to the seller for the contribution in most cases.
Additionally, you may well get yourself into trouble the other way around, especially when the seller contribution is used for interest rate buy down. Your Home Buyer’s Workbook specifically states that the seller’s contribution may not be funded by increasing the sales price.