Interested parties refer to sellers, real estate agents, builders, developers or other parties with an interest in the transaction. Interested parties may contribute up to 6 percent of the sales price toward the borrower’s origination fees, other closing costs and discount points. The 6 percent limit also includes:
- Payment for permanent and temporary interest rate buydowns, and other payment supplements;
- Payments of mortgage interest for fixed rate mortgages;
- Mortgage payment protection insurance; and
- Payment of the Upfront Mortgage Insurance Premium (UFMIP).
Interested party contributions that exceed actual origination fees, other closing costs, and discount points and Interested party contributions exceeding 6 percent are considered inducements to purchase and result in a dollar-for dollar reduction to the adjusted value of the property before applying the appropriate LTV percentage.