Question

A couple is making a 5 percent down payment on the purchase of a house selling for $150,000. How much will the sellers be allowed to contribute to the purchaser's closing costs under Fannie Mae's guidelines?

Answer 1

The sellers can contribute up to 3% of the purchase price to the buyer's closing costs for a house selling for $150,000 with a 5% down payment under Fannie Mae's guidelines, which equals $4,500.

Step-by-step explanation:

A couple is making a 5 percent down payment on the purchase of a house selling for $150,000. Under Fannie Mae's guidelines, the amount the sellers are allowed to contribute to the purchaser's closing costs varies depending on the down payment. However, the question needs additional context to determine the exact percentage the seller can contribute because Fannie Mae's guidelines set seller contributions as a percentage of the sales price depending on the down payment made, which can differ from 3% to 9%. Since the couple is making a 5% down payment, the typical contribution allowed under Fannie Mae's conventional loan limits is up to 3% of the purchase price for down payments of less than 10%.

If these guidelines are applied, for a $150,000 house with a 5% down payment, the maximum amount the sellers can contribute to closing costs would be 3% of $150,000, which is $4,500.