- The rebate may be used in conjunction with FHA buyers
- The rebate agreement between the Realtor and the buyer must be obtained and accompany the Purchase/Sales contract
- The total real estate commission must be within ordinary and customary practices
- The rebate cannot exceed 1% of the sales price
- The rebate is considered an interested party contribution (and financing concession), and is applied toward applicable limits
- The borrower must have the minimum investment requirement into the transaction
- If the rebate is applied to the borrower's closing costs, it is credited on the HUD (in the 200 series line items) as a credit to the borrower
- If the rebate is sent after closing and not part of the settlement at the table, it is disclosed as paid outside of closing (in the 200 series line items) as a POC credit to the borrower
These are general guidelines and not a comprehensive list. Please consult your mortgage officer if you have any questions concerning the rebate. All lenders have their own rules and guidelines for handing the rebate.
The long and the short of it is that the rebate is legal.
