2% cap on seller credit for qualifying loans

[James Kim]

Hello,

thank you in advance for your responses. My question is whether the 2% cap on seller credit applies to credits (rate buy down cost, closing costs etc) only applies when the credit is coming from the seller?

Does it make any difference if those costs are covered by the lender? 

I don't know how the 2% cap works in terms of "who" is the one "paying" for those costs.

I have a situation where a seller credit of 2% cap is being applied but the builder (new construction) is telling me the credit comes from the lender, not the builder. So I was curious.

Thank you!

James

[Justin Brickman]

Hey James, 

The 2% cap should be IPC only (Interested Party Contributions). The real estate agent or seller credits would be considered IPC, lender credits are different.