I know advertising with a realtor requires each party pay their pro-rated share of the costs. We have a lender that wants to create a marketing flyer with the contractor/builder for homes in a new development. Could this be considered a Section 8 violation if the builder doesn't share in the cost of the ad (flyer)?

Yes.

I am not sure the answer is that cut and dried. It depends on whether or not the builder is providing any settlement services. Typically a builder would not.

12 U.S. Code § 2607 - Prohibition against kickbacks and unearned fees

(a) Business referrals

No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.

Good clarification Randy. I was keying on the wording "Could this be considered . . ." because it was vague. It certainly could be, but isn't necessarily a RESPA section 8 violation.

Mel: If you have more specifics you could share, we might be able to give a more definitive response.

Our lender is advertising new homes in a development with the builder's information on the same flyer. If the builder is referring the applicant to our lender, is he getting a 'thing of value' for that referral? The builder's goal is to sell the house, regardless of who finances it.

It still does not make him a settlement service provider.

If that's all the builder is getting (the sell), then there are no section 8 issues. If they are referring and get something (kickback, special treatment, etc.) from the lender (or vice versa), then you have a problem.