Issue: Q&A – May 25, 2020

Can a Seller Credit Be Used for Transfer Tax?

Question: I was told that if a borrower is given a 6% seller credit, the buyer and seller can agree that the transfer tax [which is typically divided evenly by both parties in my area] can be paid solely by the seller.  Is this correct? MC – Interested Party Contribution Rules – All Agency Guidance […]

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Can a loan originator reach out to a VA appraiser?

Question: Is it against guidelines for a Loan Officer to reach out to a VA appraiser? Answer: In March of 2019 VA revised Chapter 10 of the Lenders Handbook.  In this revision they provided very specific guidelines regarding what parties can contact the appraiser, and for what reasons. See the excerpts from Chapter 10 below. […]

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Determining Rental Income on a Consolidated Schedule E

Question: Our client’s rental income was reported as separate properties on their 2018 return.  However, on their 2019 the rental income was consolidated.  The IRS regulation 1.469-4(c) allows this, but we are struggling with documenting the rental income.  What are FHA guidelines for this situation? Answer: The consolidation approach certainly does make it easier for […]

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What Is Delayed Financing and How Does It Work?

Question: Can you explain what delayed financing is and how a borrower would use it to their advantage?  MC – Refinance Chart – All Agency Guidance Answer: Let’s say you are in a bidding war over a property and have cash to pay for that property. You don’t really want to pay cash, but you […]

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When Is an FHA New Construction Subject to Flipping Rules?

Question: I have a new construction property where the land was owned by the buyer, they deeded it to the builder to build a home.  FHA is considering this a flip. What new construction scenarios are considered flipping by FHA? Answer: New construction is basically a blanket exception to the flipping rules.  There are no […]

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