I have a question regarding the down payment assistance total costs exemption to provide a separate Loan Estimate/Closing Disclosure. The attorney that closes both the first mortgage and the DPA second charges $150 - $200 to close the second mortgage. The other fees fall under recording and counseling service fees. Can we include this attorney fee in with the first mortgage LE/CD or must we produce a separate LE/CD due the $150- $200 attorney fee exceeding the 1% of credit extended?

What "down payment assistance total costs exemption"?

I think OP means the partial exemption for certain mortgage loans under §1026.3(h), specifically the 1% rule in §1026.3(h)(5).

I only know because I'm facing a similar problem... except mine is due to the public fund providing the DPA is requiring Lender's Title Insurance.

Profit Defender is correct. I am referring to the partial exemption for certain mortgage loans under §1026.3(h), specifically the 1% rule in §1026.3(h)(5).

From 1026.37:

(f) Closing cost details; loan costs. Under the master heading “Closing Cost Details,” in a table under the heading “Loan Costs,” all loan costs associated with the transaction. . . .

IMO the attorney fee is specific to the DPA loan and is not a charge associated with the first lien transaction therefore you would not be allowed to charge it to that transaction.

Just to keep the momentum going on DPA loans, what if the seller in a buyer/seller transaction wants to cover the costs for the buyer? Could the seller cover the closing fees for the DPA loan as well?