Can a borrower receive cash back at closing?

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Cash back at closing on a purchase transaction cannot exceed the amount the applicant(s) has put into the transaction, such as:

  • Earnest Money Deposit (EMD)
  • Any fees Paid Outside of Closing (POCs)
  • Home Inspection
  • Termite Inspection

Any amount over what the applicant has paid should be applied as a principal reduction, first to the DAP loan (if applicable), otherwise, to the first mortgage.

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