FHA To Lower Cap on Seller Concessions
The FHA is expected this summer to slash the cap on “seller concessions” from 6 percent of the home price to 3 percent. In announcing the policy change, FHA officials said the 6 percent maximum “exposes the FHA to excess risk by creating incentives to inflate appraised value.” Some have called for a “sliding scale” approach, with higher concessions allowed on lower-priced homes and the lowest concessions permitted on more expensive property. Seller concession rules allow the seller to pay for an array of services and taxes connected with the deal.
[SOURCES: Information, Inc.; Chicago Daily Herald]