{"id":2579,"date":"2015-12-07T17:54:13","date_gmt":"2015-12-07T17:54:13","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=2579"},"modified":"2020-07-13T22:34:07","modified_gmt":"2020-07-13T22:34:07","slug":"realtor-commission-down-payment","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/realtor-commission-down-payment\/","title":{"rendered":"Can a Realtor Use Commission as Down Payment on a Home"},"content":{"rendered":"\n

Check out this success story and it is a\u00a0little known\u00a0advantage for\u00a0licensed Real Estate Agents<\/a>.\u00a0Actually, a Realtor<\/a> commission\u00a0may be used\u00a0as down payment for the purchase of\u00a0their own\u00a0home<\/a>.\u00a0Normally, lenders are required to prove down payment in the buyer’s bank account.\u00a0So, if underwriters require proof of funds in the bank, how can Realtors<\/a> use commission which isn’t paid until after the loan closing? Let’s show two great mortgages which allow a Realtor to buy a home and use their commission as down payment. <\/p>\n\n\n\n

How Can I Use My Realtor Commission to Buy My House?<\/h2>\n\n\n\n

Here is an actual example.\u00a0A real estate agent went under contract to purchase a new construction home<\/a>.\u00a0Based on the purchase price, the loan was at the top of the FHA<\/a> loan size limit.\u00a0Although, the Realtor did not have the full 3.5% down payment required for FHA loans.\u00a0Therefore, the agent asked “Is there a way I can use my commission\u00a0from this sale as my down payment?”.\u00a0Well, yes there is!\u00a0So, do the quick math with a 2.5% buyer agent commission paid.\u00a0Ultimately this left the agent only needing 1% down payment after crediting the commission!<\/p>\n\n\n\n

\"Realtor<\/figure><\/div>\n\n\n\n

Another option which could have been used is the Home Advantage Down Payment Assistance program.\u00a0 It is offered by the NC Housing Finance Agency<\/a>. Along with the commissions used as down payment, the DPA could have both covered the full down payment!<\/p>\n\n\n\n

FHA Guideline: Acceptable source of funds for down payment<\/h3>\n\n\n\n

Real Estate Commission from Sale of Subject Property refers to the Borrower\u2019s (i.e., buyer\u2019s) portion of a real estate commission earned from the sale of the property being purchased.\u00a0Thus, lenders may consider Real Estate Commissions from the Sale of the Subject Property as part of the Borrower\u2019s acceptable source of funds.\u00a0Obviously, the borrower\u00a0must be\u00a0a licensed real estate agent.<\/p>\n\n\n\n

Fannie Mae Allows Realtor Commission as Down Payment<\/h3>\n\n\n\n

Not only will FHA allow commission as down payment, but a Fannie Mae loan could too.\u00a0Sometimes a conventional loan makes more sense. Buyers with high credit scores or higher down payment are good examples. If a Realtor is using a conventional loan to buy a home and wants to use the commission from their purchase, Fannie Mae requires both of the following…<\/p>\n\n\n\n