The amount the seller contributes is written into the Purchase and Sale Agreement. Once that is in writing, the amount can be used in calculating the interest rate buy down. The seller simply then brings the funds to the closing table.
Any funds YOU are contributing toward buy down are part of your MRF, although the amount of the buy down can still change any time prior to the submission of the bank application.
As the Home Buyer’s Workbook states, These funds must be deposited into your bank account before NACA Qualification and remain there through bank application and closing:
- 401K Assets (or Other Assets)
- A copy of the 401K withdrawal and repayment terms are required.
- Gift Funds
- An official gift funds form is to be completed and a letter from the gift giver stating the relationship to you, (it must be from a relative, spouse or fiancé), the gift givers contact name, phone number, address, that it is not to be repaid, and the property address of the home being purchased.
- Tax Refund MoniesBottom line, your money must be recorded before you are qualified. If you come across any significant new money AFTER your qualification(inheritance etc) You will not only be required to write a Letter of explanation for it, you will have to be re-qualified to increase your qualification if that is your goal.
Interest rate buy down is one of the most valuable benefits of purchasing your home through the NACA program.