Upcoming Foreclosures

Fannie Mae foreclosures and seller contributions?

I'm considering putting an offer on a Fannie Mae homepath house and am getting conflicting info about asking for a seller contribution to cover my closing costs and prepaids. I understand that Fannie is exempt from some closing costs normally paid by the seller such as stamps and intangible tax and it falls on the buyer to cover them. My realtor has told me that Fannie can give up to 6% to cover my costs, however, none of the 6% can be put toward the exempted closing costs. I took that to mean I would have to go out of pocket on closing costs even if the 6% could cover everything. Has anyone had any first hand experience dealing with this? Thanks

Public Comments

1. The 6% will cover only recurring closing costs. Everything except your down payment and your impounded taxes. (you pay your appraiser as well c.o.d)
2. You shouldn't have any trouble using up the 6%. Homepath homes make the buyer pay the entire escrow fee and often the seller's title insurance policy. That is $2,000. You can use the rest for your first month's mortgage payment, fire insurance, property tax, loan fees. If you are unsure, get a 4.75% loan. That will generate 4% in loan fees and is acceptable to FNMA.