Home > Blogs > Rodney Mason > Rodney Mason - Conv, FHA, VA, USDA, Renovation
bookmark_borderbookmark

Is Cash Back to a Buyer at Closing Allowed?

By
Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

Is Cash Back to a Buyer at Closing Allowed? 

It all depends on the situation and the loan program being obtained for the financing.  Lending guidelines only allow a buyer to get cash back at closing under very specific circumstances.  The buyer can never get back more money than they have contributed toward the transaction.  The contribution would typically come in the form of earnest money given when the sales contract was written.  The cash back to the buyer at closing can only come after they have satisfiedall of their down payment, closing costs, and pre-paid expense requirements. 

Many down payment assistance programs state that buyers must invest a certain dollar amount of their own funds into the transaction.  Most require either $500 or $1,000.  There are some that require certain minimum percentages. 

Only after all of those requirements have been satisfied can a buyer get back a check at closing.  Again, that amount can never exceed the amount that the buyer has personally invested into the transaction. 

 

Posted by

 

It is always advisable to consult with a knowledgeable lending professional when navigating today's turbulent mortgage and real estate marketplace.  I am committed, qualified and equipped to help you evaluate your options!

 

Also check out:

Conventional Financing Mortgage Program Overview/Updates

FHA Financing Mortgage Program Overview/Updates

USDA Financing Mortgage Program Updates  

 

Programs Include:

 

  • Conventional (Fannie Mae & Freddie Mac)

  • FHA, USDA, & VA

  • Jumbo to $3,000,000

  • Bank Statement Program for Self-Employed Borrowers

  • Foreign National Program

  • Investor Cash Flow

  • Non-Warrantable Condos

  • Renovation - FHA 203(k), Fannie Mae HomeStyle Renovation, & VA Renovation

 

  • ************************************************************************************************************
  • Rodney Mason is a Licensed Branch Manager located in Atlanta, GA.   He can be reached at (404) 591-2453.

  • Providing financing for all cities across Georgia including: Acworth, Albany, Alpharetta, Athens, Atlanta, Augusta, Austell, Avondale Estates, Blairsville, Bloomingdale, Blue Ridge, Bogart, Brunswick, Buckhead, Buford, Canton, Carrollton, Cartersville, Chatsworth, Clayton, College Park, Columbus, Commerce, Conyers, Covington, Cumming, Dahlonega,  Dacula, Dalton, Dawsonville, Decatur, Doraville, Douglasville, Duluth, Dunwoody, East Point, Fayetteville, Flowery Branch, Gainesville, Greensboro, Hampton,  Hapeville, Hinesville, Hiram, Jackson, Jefferson, Jonesboro, Kennesaw, Lagrange, Lawrenceville, Lilburn, Lithia Springs, Macon, Madison, Metter, Morganton, Morrow, Newnan, Norcross, Oakwood, Peachtree City, Pooler, Richmond Hill, Riverdale, Rome, Roswell, Sandy Springs, Savannah, Scottdale, Statesboro, Stockbridge, Stone Mountain, St Marys, Sugar Hill, Suwanee, Thomasville, Thunderbolt, Tucker, Tybee Island, Valdosta, Waleska, Warner Robins, Waycross, Wilmington Island, Winder, Woodstock, and many more.

    Providing financing for all cities across Alabama including:     Alabama Port, Anniston, Athens, Auburn, Bessemer, Birmingham, Boaz, Bridgeport, Cedar Bluff, Chickasaw, Clayton, Coden, Dauphin Island, Decatur, Dothan, Eufaula, Fairfield, Fairhope, Florence, Foley, Forestdale, Fort Morgan, Fort Payne,Gasden, Grand Bay, Gulf Shores, Heron Bay, Homewood, Hoover, Jasper, Josephine, Madison, Meadowbrook, Midfield, Mobile, Mon Louis, New Hope, Orange Beach, Oxford, Oyster Bay, Phenix City, Prichard, Rainbow City, Saraland, Satsuma, Scottsboro, Selma, Troy, Theodore, Tillmans Corner, Trussville, Tuscaloosa, Vestavia Hills, Warrior and many more.

  •  

  • Providing financing for all cities across Florida including: Altamonte Springs, Atlantic Beach, Boca Raton, Bradenton, Cape Coral, Clearwater, Coral Springs, Daytona Beach, Delray Beach, Destin, Fort Lauderdale, Fort Myers, Fort Walton Beach, Gainesville, Hollywood, Homestead, Jacksonville, Jupiter, Key Largo, Key West, Lake City, Largo, Marathon, Mexico Beach, Miami, Naples, New Smyra Beach, Ocala, Orlando, Palm Coast, Panama City Beach, Pensacola, Pompano Beach, Port St Joe, Sanibel Island, Sanford, Sarasota, St Augustine, St Petersburg, Tallahassee, Tampa, Vero Beach, West Palm Beach, & Winter Park, and many more.

 

  • Providing financing for all cities across South Carolina including: Aiken, Anderson, Beaufort, Bluffton, Charleston, Columbia, Conway, Edisto Island, Florence, Greenville, Hilton Head, Johns Island, Myrtle Beach, North Augusta, Orangeburg, Rock, Hill, Spartanburg, Sullivans Island, Summerville, and many more.  

  •   

    Providing financing for all cities across Tennessee including: Athens, Brentwood, Bristol, Chattanooga, Clarksville, Cleveland, Cookeville, Dyersburg, Franklin, Gatlinburg, Greeneville, Johnson City, Kingsport, Knoxville, Maryville, Memphis, Morristown, Murfreesboro, Nashville, Newport, Oak Ridge, Pigeon Forge, Sevierville, and many more

 

All mortgage lending guidelines are accurate at time of post, but are subject to change without notice.  Please call for the most current information.

    

           

Comments (5)
Subscribe to CommentsComment

Submit
Show All Comments
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

You are right cash back to the buyer almost always can never be more than the buyer put into the transaction but it can happen if all the guidelines have been met for the buyer.

Nov 13, 2010 05:09 AM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Rodney - It doesn't happen often but there are times when this scenario does come up.  A few times though, I've had a couple of my borrowers tell me that instead of getting a little money back, they would rather use it to buy their rate down instead. 

Nov 13, 2010 05:25 AM
Charles Edwards Bentonville
Coldwell Banker Harris McHaney & Faucette 479-253-3796 - Bentonville, AR
AR REALTOR, Bentonville Real Estate Agent and Broker

Rodney, From a broker stand point there is never cash back at closing,  only a credit on a HUD statement as far as I know.

Nov 13, 2010 12:41 PM
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Pat....Correct, the amount the buyer gets back can never exceed the amount that they have personnally contributed to the transaction.

Donne.....You are very correct.  I have only had it happen a handful of times.  Typically its when someone has used the HUD $100 REO program or they have used a down payment assistance program.  When 100% financing was widely availble, it came up more often then.

Charles...Cash back to the buyer is acceptable so long as its a refund of money that they have personally invested in the transaction. 

 

Nov 13, 2010 01:02 PM
Kevin Warren
Veterans United Home Loans NMLS #1907 - Virginia Beach, VA

Don't forget VA loans where you can get concessions from the seller to pay down good or bad debt. The seller can pay down a debt to help the buyer qualify, or pay off judgements to make a buyer eligable for a loan. It is a great way to not let any money stay at the closing table!   

Jan 14, 2011 02:38 AM
Back to Top
Rainmaker
447,361

RodneyMason

VP of Mortgage Lending - AL, FL, GA, SC, & TN
Profile
BlogApply Now
local_phone(404) 591-2453
business(404) 601-8488
Contact The Author

Service Areas

  • Atlanta, GA
  • Macon, GA
  • Savannah, GA
  • Birmingham, AL
  • Fort Lauderdale, FL
  • Tampa, FL
  • Knoxville, TN
  • Charleston, SC

Real Estate Resources

Recent Posts

View more Recent Posts   arrow_forwards

Additional Information

View Rodney Mason's profile on LinkedIn

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?