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#1320368 - 01/07/10 09:28 PM Reservation fee and gift funds - RESPA
Bville Offline
Diamond Poster
Bville
Joined: May 2001
Posts: 1,282
Out West
I have two scenarios I'd like opinions on.

1) State housing loans we pay a "reservation fee" to reserve funds at a certain interest rate. I think this should be part of the Origination Charge in Block 1 and Line 801, but can't find anything to back me up on that.

2) The state housing program also gives the borrower 3% in gift funds to help with closing and the borrower receives a slightly higher rate. I think this should be shown as a credit to the borrower in the 200 series on the HUD. Anyone agree?

I donít think either scenario should be reflected in Block 2 as a specific charge or credit.

I can't find anything in the Q & A or HUD instructions that directly support my opinions so would like some help there too.

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#1320647 - 01/08/10 01:44 PM Re: Reservation fee and gift funds - RESPA Bville
Bville Offline
Diamond Poster
Bville
Joined: May 2001
Posts: 1,282
Out West
bump.

I decided that the "Reservation Fee" should not go in Block 1/Line 801 but rather in Block 3/Line 808 or higher because it is a fee for a government loan program and we'll treat it like a VA Funding fee.

I could still use some thoughts on the 3% gift funds. It's not a credit by the bank or a mortgage broker so I'd like to keep it out of Block 2 as a credit. I'm leaning towards the 200 series still. Any thoughts?

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#1321010 - 01/08/10 05:07 PM Re: Reservation fee and gift funds - RESPA Bville
RolTyde Online
Member
Joined: Nov 2008
Posts: 78
Anywhere but here
Have you spoken with your state's housing finance authority? We have a similar program and our plan is to get with them (haven't had time yet). The state housing finance authority is the final lender on the loans we do to them and we would just follow their recommendations.

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