Posted By: WHEDA
Cash to Borrower at Closing FHA Purchase Loan - 09/05/14 07:06 PM
I searched but came up with nothing, so I'll ask - If a borrower has paid an atypical amount of earnest money (say $2,500) when entering into a purchase contract then they finance 96.5% of the price plus the UFMIP, receive a closing cost credit from the seller and obtain grant funds for down payment and closing costs, all of which exceeds the amount needed to cover the down payment and costs, can the borrower receive some or all of the earnest money back in cash (check) at the closing. All I have been able to find in the HUD Handbooks is 4155.2 6.A.1.d which states "a per diem interest credit may not result in cash back to the borrower".