FHA Non-Allowable Costs

The buyer must pay for any costs he/she agrees to pay in the signed purchase agreement.

If a borrower obtains FHA financing, there is approximately $1,200-$1,600 in non-allowable costs that cannot come from the borrower. Is the seller required to pay the non-allowable costs? The seller is only obligated to pay the costs if he/she agrees to pay them in the original purchase contract.  If a seller has not agreed to pay the non-allowable costs and a buyer later comes back to say that they have FHA financing and the seller is required to pay the costs, the seller does not have to re-negotiate the contract or pay the costs. 

A seller can also opt not to accept an offer that includes the provision that the seller is to pay FHA non-allowables.  It is best to get pre-approved for a loan prior to negotiating a purchase so both the buyer and the seller are aware of the type of financing and the requirements involved at the time of the signing of the contract.