As the use of FHA financing increases dramatically, the use of seller-funded down payment gifts is also increasing.  We're getting many questions regarding the verbiage that is required in a sales contract if the seller is contributing the mandatory 3% FHA down payment.  Here it is:  

"Seller agrees to contribute 3% of the purchase price, plus a processing fee of $499, to The Nehemiah Program.  Seller also agrees to pay __% of the purchase price towards Buyers' closing costs, pre-paids, and FHA non-allowables."

 The seller is allowed to contribute up to 6% of the sales price for the down payment, plus an additional 6% towards the buyers' closing costs.  Typically, a seller will only pay the 3% + $499 processing fee to Nehemiah if they need to pay the downpayment to get the house sold.  The amount of the closing costs depends on the loan, so always call us first before assuming the closing costs will be covered by a certain percentage of the sales price.

 Nehemiah only requires that the above verbiage be in the contract, and that one disclosure be signed by the sellers.  We take care of everything else.  This is the easiest down payment assistance program available.

 And remember that a seller can pay the down payment alone, the closing costs alone, or both.

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